ASTS Wheel: Strike Selection, Premium & Risk
How to sell wheels on AST SpaceMobile — optimal strikes, expected premium, and the risks that actually matter for a mid-cap communication name.
Is ASTS a good wheel candidate?
ASTS (AST SpaceMobile) is a mid-cap communication name with a low share price and excellent options liquidity. Implied volatility on this ticker is elevated, so option premiums are rich — but the same volatility cuts both ways and can move the stock hard in either direction. It pays no dividend, so every dollar of income must come from the options you sell.
Strike selection for a ASTS wheel
For the ASTS wheel, sell puts 15-20% below the current price until you are assigned. Once you own the shares, flip to covered calls 12-18% above your cost basis. On a very high-volatility name, cycling 14-28 DTE so you can react to sharp IV crushes and moves expirations keeps theta working in your favor without over-exposing you to gamma around earnings.
Expected premium and income on ASTS
Typical monthly premium collected on ASTS runs around 3.5-6.0% of capital, which annualizes to roughly 42-72% if you sell new contracts every cycle. Capital required to run a single contract wheel on ASTS is under $5,000 — the share price and the 100-share lot size set the minimum, not the strategy.
Risk management for ASTS wheel trades
The wheel works beautifully in sideways and slowly-trending markets but struggles in sharp selloffs where you get put stock well above market and then have to wait for covered-call opportunities at your cost basis. On a very high-volatility name like ASTS, expect 5-10%+ single-day moves during stress. Size positions so one adverse gap doesn't blow up the account. Communication stocks are a mix of traditional media (ad spend cycles) and internet platforms (user growth); earnings moves tend to be outsized.
ASTS Wheel FAQ
Is ASTS a good stock for the wheel strategy?
ASTS is excellent for the wheel because of its penny-wide spreads and elevated IV (high premium, higher assignment risk). No dividend means all your return comes from premiums and price appreciation.
What expiration should I use for ASTS wheel trades?
Use 14-28 DTE so you can react to sharp IV crushes and moves as a default for ASTS. Shorter expirations let you react to IV resets and price gaps.
Is ASTS suitable for beginners selling options?
Mostly yes, though beginners should use small size and confirm liquidity on each expiration they trade.
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