Wheel strategy (cash covered puts and covered calls) for an annual income

The Wheel Strategy is yet another situation where someone takes two equivalent strategies and needlessly fabricates a new name for alternating back and forth between the two strategies. To grasp this, you need to understand that short puts and covered calls (same strike price and expiration) are synthetically equivalent strategies, meaning a similar P&L.

Is anyone else doing this for regular income? The problem with selling short puts and covered calls is that they have an asymmetric risk/reward. You have a modest profit potential while bearing all of the risk. In down markets, you'll own the stock and at some point, the underlying gets too low to sell any kind of decent premium without locking in a loss. The only way to overcome this is to have superior timing and selection (not many do).

As an extreme example, consider the SPY at $150 at the end of 2007. If you sold short puts or did a covered call, as the SPY dropped to the low 70's 14 months later, how well do you think that covered call writing would have worked?

AFAIC, selling short OTM puts should be done when you want to acquire a stock at a lower price and selling covered calls should be done when you want to sell a stock at a higher target sell price. IMHO, in general, a better choice for regular income (and in size) is a vertical spread (and the equivalent strategy of a long stock collar). While the reward is lower, it evens out the R/R and protects you from disasters. It's better risk management.

And yes, I have sold option premium for over 40 years. Back then, it was covered calls. By the mid 80's, I moved on to short puts. Ironically, the Friday before the crash of 1987 was option expiration. Every short put that I sold or rolled to that day was well ITM on Monday when the market dropped 22%. That day opened my eyes to the need for risk management.