TDG Options Trading — Covered Calls, Puts & the Wheel
A complete guide to selling options on TransDigm Group. Expected premiums, strike selection, real example trades, and the four strategies that actually work for TDG.
Why trade options on TDG?
TDG (TransDigm Group) is a large-cap industrials name with an elevated share price and good options liquidity. Implied volatility is moderate — enough premium to make selling options worthwhile, without the heart-stopping price swings you get on speculative names. It pays no dividend, so every dollar of income must come from the options you sell.
Typical monthly premium collected on TDG 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 TDG is $20,000+ — the share price and the 100-share lot size set the minimum, not the strategy.
Four strategies that work on TDG
TDG Covered Call
Sell upside calls against 100 shares you already own to collect premium every month while capping your upside.
Read the TDG Covered Call guide →TDG 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 TDG Cash-Secured Put guide →TDG Wheel
Alternate between cash-secured puts and covered calls on the same ticker to generate continuous premium income.
Read the TDG Wheel guide →TDG 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 TDG Poor Man's Covered Call guide →TDG options FAQ
What is the best strike price for a TDG covered call?
On TDG, 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 TDG?
Typical monthly premium on TDG 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 TDG cash-secured put?
A delta of 0.20-0.30 on TDG 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 TDG?
Cash required is 100 × strike price. For TDG, that's roughly $20,000+ 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 TDG a good stock for the wheel strategy?
TDG is solid for the wheel because of its reasonable spreads and moderate IV (good premium/risk balance). No dividend means all your return comes from premiums and price appreciation.
Can you run a poor man's covered call on TDG?
Yes. Buy a 0.80+ delta LEAPS on TDG 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 $20,000+ to roughly 30-50% of that — a meaningful improvement when the share price is an elevated share price.
What expiration should I use for TDG options strategy trades?
Use 30-45 DTE as a default for TDG. This is the classic theta sweet spot and works well on a stable ticker like this.
Is TDG suitable for beginners selling options?
Yes — it's a well-known, liquid name with established options markets, which is what beginners need. Always check the bid/ask spread before entering — anything wider than 5% of the mid price is a warning sign.
Run the numbers on TDG yourself
Use the free OptionsPilot calculator to price covered calls and cash-secured puts on TDG with live quotes.
Open the TDG Strike Finder →