EEM Options Trading — Covered Calls, Puts & the Wheel
A complete guide to selling options on iShares MSCI Emerging Markets ETF. Expected premiums, strike selection, real example trades, and the four strategies that actually work for EEM.
Why trade options on EEM?
EEM (iShares MSCI Emerging Markets ETF) is one of the most heavily traded ETFs for options strategies. Penny-wide bid/ask spreads and deep open interest on every strike make it ideal for premium sellers. Because EEM is a basket rather than a single name, single-stock earnings risk is diffused, which is a meaningful edge for consistent income.
Typical monthly premium collected on EEM runs around 1.0-2.0% of capital, which annualizes to roughly 12-24% if you sell new contracts every cycle. Capital required to run a single contract wheel on EEM is under $5,000 — the share price and the 100-share lot size set the minimum, not the strategy.
Four strategies that work on EEM
EEM Covered Call
Sell upside calls against 100 shares you already own to collect premium every month while capping your upside.
Read the EEM Covered Call guide →EEM Cash-Secured Put
Sell a put backed by cash so you either get paid to wait or acquire the stock at a discount to today's price.
Read the EEM Cash-Secured Put guide →EEM Wheel
Alternate between cash-secured puts and covered calls on the same ticker to generate continuous premium income.
Read the EEM Wheel guide →EEM Poor Man's Covered Call
Replace the 100 shares with a long-dated deep-ITM LEAPS call and sell short-dated calls against it to reduce capital.
Read the EEM Poor Man's Covered Call guide →EEM options FAQ
What is the best strike price for a EEM covered call?
On EEM, target 5-8% out of the money at 0.20-0.30 delta. On a moderate-volatility stock like this, closer-to-the-money strikes chase premium but spike assignment probability to uncomfortable levels.
How much premium can I collect selling calls on EEM?
Typical monthly premium on EEM is 1.0-2.0% of position value, annualizing to 12-24% when you roll every cycle. Earnings months can pay 2-3x the normal rate because of elevated IV.
What is the best delta for a EEM cash-secured put?
A delta of 0.20-0.30 on EEM balances premium income with assignment probability. Many traders anchor to 0.20 delta as a starting point and adjust based on their willingness to own shares.
How much cash do I need to sell a put on EEM?
Cash required is 100 × strike price. For EEM, that's roughly under $5,000 per contract at a typical strike. Most brokers let you use margin, but for a true cash-secured put you set aside the full amount.
Is EEM a good stock for the wheel strategy?
EEM is excellent for the wheel because of its penny-wide spreads and moderate IV (good premium/risk balance). It also pays a dividend, which you continue collecting while holding the shares between wheel legs.
Can you run a poor man's covered call on EEM?
Yes. Buy a 0.80+ delta LEAPS on EEM dated 12-18 months out as your synthetic long, then sell short-dated calls 5-8% above the stock at 0.20-0.30 delta. Capital tied up drops from under $5,000 to roughly 30-50% of that — a meaningful improvement when the share price is a low share price.
What expiration should I use for EEM options strategy trades?
Use 30-45 DTE as a default for EEM. This is the classic theta sweet spot and works well on a stable ticker like this.
Is EEM suitable for beginners selling options?
Yes — it's a well-known, liquid name with established options markets, which is what beginners need.
Run the numbers on EEM yourself
Use the free OptionsPilot calculator to price covered calls and cash-secured puts on EEM with live quotes.
Open the EEM Strike Finder →