Wheel Backtest: Does the Wheel Beat Buy-and-Hold? 40 Tickers

A wheel backtest answers one question: would selling puts and covered calls on a stock have beaten simply owning it? In Days to Expiry's simulated two-year wheel backtest on 40 stocks and ETFs, the answer was no for most of them. The wheel beat buy-and-hold on 17 of 40 tickers. The median wheel return was 30.0% against 34.5% for buy-and-hold. The wheel won where prices went sideways or fell, and lagged by the widest margins where prices rallied.

These numbers come from simulations on historical option prices, with modelled pricing for every ticker. They are not live trades and not a forecast.

How this wheel backtest was run

One recipe, applied the same way to every ticker:

• Puts: sell a 35 DTE cash-secured put, 2% out of the money.
• Assignment: if the put finishes in the money, take the shares.
• Calls: sell a 35 DTE covered call, 2% out of the money, until the shares are called away.
• Management: hold every option to expiry. No rolling, no early close.
• Window: 2024-09-20 to 2026-09-18, about 728 days, roughly 11 cycles per ticker (median).
• Universe: 40 stocks and ETFs that passed the engine's publication checks (40 of 45).

Buy-and-hold is the share price change over the same window. The wheel return includes premium collected and any gains or losses on assigned shares.

Wheel vs buy-and-hold: the 40-ticker results

Sorted by how far the wheel finished ahead of (or behind) buy-and-hold. "Assigned" is the share of put cycles that ended in assignment. "Called away" is the share of call cycles that ended with the shares called away.

Two summary numbers matter more than any single row:

• 17 of 40 tickers finished with the wheel ahead of buy-and-hold.
• 36 of 40 wheels finished with a positive total return. Only XLU, XLE, UNH and ORCL lost money, and all four underlyings fell over the window.

The wheel wins when the stock goes nowhere

Group the 40 tickers by what the share price did, and the pattern is plain:

When the underlying fell, premium cushioned the decline. PG fell 16.0% while its simulated wheel made 11.6%. TLT fell 17.8% and the wheel made 6.8%. Every put was assigned on PG (100%), so the wheel spent most of the window holding shares and selling calls against them, and the call premium did the work.

In the flat bucket it was a coin toss: 5 of 10. The wheel's median return was only 1.6 points above holding.

The wheel loses badly in rallies

In the top bucket the wheel won once in 12 (NVDA, by 2.6 points). Gold and silver miners show why. AEM, WPM, GDX and SLV all rose more than 110%, and the wheel trailed each by 83 to 110 points. A 2% OTM covered call caps each cycle's upside at about 2% plus premium. When the shares get called away in a run, the next put sells below a market that has already moved on.

AMD is the extreme case: the wheel returned 92.0%, a good result in isolation, while the stock returned 259.0%. Seen in isolation, the wheel looked like a win. Compared with holding, it gave up 167 points.

TSLA is the exception worth noting. It rose 52.9% but swung hard both ways, and the wheel finished 44.2 points ahead. Volatility pays premium. A trend that runs in one direction takes that premium back through capped upside.

What the backtest says about assignment

Assignment rates were similar for winners and losers. The median put assignment rate was 36% on the tickers where the wheel won and 30% where it lost. Assignment itself is not the problem. What happens to the shares after assignment decides the result:

• On a stock that stalls, assigned shares keep earning call premium. That is the PG and TLT pattern.
• On a stock that runs, assigned shares are called away early, and the gain above the strike is gone. That is the AMD and gold-miner pattern.

If you run the wheel, the useful question is not "will I get assigned?" but "what do I expect this stock to do while I hold it?" Our wheel strategy guide covers the DTE and strike choices in each leg, and the cash-secured puts playbook covers assignment risk on the put side.

How to read your own wheel backtest

A few rules keep a backtest honest:

1. Always compare against buy-and-hold. A wheel that made 50% sounds good until you see the stock made 130%. The best stocks for the wheel are the ones where you would be content to own the shares through a flat or choppy stretch, not the ones you expect to double.
2. Match the recipe before you compare. These results are for 35 DTE, 2% OTM, held to expiry. A different DTE, a wider strike, or rolling before expiry changes every number. They do not transfer to credit spreads or other structures.
3. One window is one market. This window had big rallies in semiconductors and precious metals. A different two years would rank the tickers differently.
4. Track your real wheel the same way. Premium, assignments and called-away shares should roll up to one return per position. Otherwise you cannot see whether your wheel is beating the stock. Start with your true cost basis after rolls, then compare it with the share price.

To run the same engine on a ticker of your choice, use the wheel strategy backtest tool. Published snapshots for a fixed recipe are in the wheel backtest catalog. The same 40 tickers, with a version that closes every trade at 21 DTE, are on the 21-day rule research page.

FAQ

Does the wheel strategy beat buy-and-hold?

Not on average. In a simulated two-year wheel backtest (35 DTE, 2% OTM, held to expiry) on 40 stocks and ETFs, the wheel beat buy-and-hold on 17 of the 40. The median wheel return was 30.0% against a median buy-and-hold return of 34.5%. The wheel won mostly where the underlying went sideways or fell, and lost by the widest margins where the underlying rallied.

When does the wheel strategy outperform holding the stock?

When the stock goes nowhere or drops. In the backtest, the wheel beat buy-and-hold on 7 of the 8 tickers whose share price fell over the two years, and on 1 of the 12 tickers whose price rose more than 60%.

Why does the wheel lag in a strong rally?

The covered call caps your upside at the strike. When a stock runs, the shares get called away and you rebuy later at a higher price, or sell puts below the market. In the backtest, AMD's wheel returned 92.0% while holding AMD returned 259.0%.

How was this wheel backtest run?

Days to Expiry's backtest engine sold 35 DTE puts 2% out of the money, took assignment, then sold 35 DTE calls 2% out of the money, holding every option to expiry. It ran on 40 tickers from 2024-09-20 to 2026-09-18. Option pricing is modelled for all 40 tickers, so these are simulated results, not live trades.