CVX wheel strategy

Is CVX good for the wheel?

For wheel-strategy traders, CVX is an excellent wheel candidate. The elevated implied volatility — richer premiums offset by higher assignment risk means cash-secured puts collect meaningful premium, and the underlying business profile (Energy — Oil & Gas) makes it a name many income sellers would be comfortable being assigned at the right strike.

CVX pays a substantial 4.4% dividend. This makes early-assignment risk around ex-dividend dates a real consideration for covered-call sellers — if the dividend exceeds the call's remaining time value, expect the call to be exercised early.

Need a refresher on the strategy itself? Read the full wheel-strategy guide and the best wheel stocks screen for context on how CVX compares to other candidates.

How to run the wheel on CVX

1. Sell a CSP. Pick a sub-spot strike from Step 1 that you'd be comfortable being assigned at. Set aside cash = strike × 100.
2. Wait for expiration. If CVX closes above your strike, the put expires worthless — you keep premium and cash. Restart with another CSP.
3. If assigned, you now own 100 shares of CVX at the strike. Your effective cost basis = strike − premium received.
4. Sell a covered call. Pick an above-cost-basis strike from Step 2. Your goal is to be called away at a profit while collecting premium.
5. If the call expires worthless, repeat Step 4 with another covered call.
6. If called away, you sold the shares above cost basis and collected two rounds of premium. Restart at Step 1.

The Wheel Tracker can log each leg of your CVX wheel and compute the true return on capital across the full cycle. For deeper reading: realistic wheel returns, when to break the wheel, wheel tax implications, and risk management.

Other wheel-candidate tickers

FAQ