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Algorithm & legal status

Important: WheelTrading is an analytics and documentation tool. All evaluations and scores are the output of a deterministic algorithm based on public market data. It is NOT investment advice, not investment intermediation and not a personal recommendation within the meaning of § 2 Abs. 8 WpHG.

What the algorithm does

For each strike of an option chain the backend computes a score from fixed sub-scores. The highest total receives gold, the second silver, the third bronze. Example factors:

  • Premium / strike (ROC, annualised)
  • ATR52 distance (strike distance normalised to 52-week volatility)
  • Open Interest (liquidity proxy)
  • Implied volatility (premium uplift, IV rank)
  • Delta (assignment probability proxy)
  • Risk flags (earnings, ex-div, IV extreme, low liquidity)

The exact formula and all thresholds are described in the topic "Scoring model (PUT L1/L2, CC)". It is open and deterministic - given the same input, the output is always identical.

What the algorithm does NOT do

  • No suitability assessment for your personal situation (knowledge,

experience, wealth, investment objectives).

  • No market forecast. A high score = more points in the formula,

not "will be profitable".

  • No consideration of your tax position, liquidity or risk tolerance.
  • No buy recommendation. Gold/Silver/Bronze is a ranking by score

points, not "buy / do not buy".

Why this matters

Under § 2 Abs. 8 WpHG, investment advice only exists when a personal recommendation for a specific financial instrument is given that is presented as suitable for the client.

WheelTrading meets none of those three criteria:

  1. There is no personal recommendation - the formula is identical

and deterministic for all users.

  1. No suitability is claimed - on the contrary, every output carries

a disclaimer.

  1. The evaluation is information / tooling, not advice.

What you do yourself

You make investment decisions on your own responsibility. Before every trade, check:

  • Does the strike match your liquidity and filter settings?
  • Do you understand the tax consequences (option premiums,

assignment, etc.)?

  • Are you prepared for the worst case (total loss after stock

assignment + further price decline)?

  • When in doubt consult an independent advisor (tax, investment) before

taking on larger positions.

Acceptance notice

On first login, WheelTrading shows an acceptance dialog where you confirm this legal classification once. You can reset the confirmation in Global settings → Legal notice; the dialog will then reappear on next page load.

Related topics

  • "Metric evaluation & risk flags" - how the score is evaluated
  • "Scoring model (PUT L1/L2, CC)" - the full pipeline
  • "Terms § 3" - the legal clause in full