VAL Wheel: Strike Selection, Premium & Risk
How to sell wheels on Valaris Limited — optimal strikes, expected premium, and the risks that actually matter for a small-cap energy name.
Is VAL a good wheel candidate?
VAL (Valaris Limited) is a small-cap energy name with a low share price and fair options liquidity. Implied volatility is high enough to pay meaningful premium without being wild, which is why this ticker shows up frequently in wheel-strategy watchlists. It pays no dividend, so every dollar of income must come from the options you sell.
Strike selection for a VAL wheel
For the VAL wheel, sell puts 10-15% below the current price until you are assigned. Once you own the shares, flip to covered calls 8-12% above your cost basis. On a high-volatility name, cycling 21-35 DTE to capture IV without excess gamma risk expirations keeps theta working in your favor without over-exposing you to gamma around earnings.
Expected premium and income on VAL
Typical monthly premium collected on VAL runs around 2.0-3.5% of capital, which annualizes to roughly 24-42% if you sell new contracts every cycle. Capital required to run a single contract wheel on VAL is under $5,000 — the share price and the 100-share lot size set the minimum, not the strategy.
Risk management for VAL 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. VAL's high-volatility profile means 3-6% daily moves are normal during earnings or macro catalysts. Energy names track crude and natural gas prices closely — OPEC headlines and inventory prints drive intraday moves far more than company fundamentals most weeks.
VAL Wheel FAQ
Is VAL a good stock for the wheel strategy?
VAL is workable for the wheel because of its reasonable 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 VAL wheel trades?
Use 21-35 DTE to capture IV without excess gamma risk as a default for VAL. This window captures the steepest part of the theta curve without excess gamma risk.
Is VAL suitable for beginners selling options?
Not ideal for beginners. Smaller-cap names can have wider spreads and sharper moves. Start with large caps or major ETFs first. Always check the bid/ask spread before entering — anything wider than 5% of the mid price is a warning sign.
Related VAL strategies
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