Getting assigned on a cash-secured put isn't a failure—it's a planned outcome that advances the wheel strategy to its next phase. The real challenge isn't the assignment itself, but properly recording it, updating your cost basis, and establishing new positions that continue generating income. This complete workflow ensures nothing falls through the cracks as you transition from cash-secured put seller to stock owner running covered calls.
Paper trading provides the perfect environment to master this workflow without risking real capital. Using a ThinkOrSwim paper trading account, you experience actual assignment mechanics, practice transaction logging, and develop the systematic habits that will serve you when transitioning to live trading. The MyATMM tracking platform bridges paper and live trading by providing identical cost basis tracking regardless of account type.
This article documents a complete weekly cycle on MRVL (Marvell Technology): handling the previous week's cash-secured put assignment, logging all transactions in MyATMM, updating position metrics, and establishing new bilateral positions—both a covered call on the newly-acquired shares and a fresh cash-secured put to potentially add more shares. The bilateral approach guarantees premium collection regardless of direction.
When you sell a cash-secured put and the stock trades below your strike at expiration, assignment is automatic. The broker purchases 100 shares at the strike price and deposits them in your account. Your cash securing the put is used to fund this purchase.
The previous week's position included a cash-secured put on MRVL with the following details:
| Parameter | Value |
|---|---|
| Strike Price | $40.50 |
| Expiration Date | January 20, 2023 |
| Premium Collected | Amount received when opened |
| Stock Price at Expiration | $39.52 |
| Result | Assigned - stock below strike |
With MRVL closing at $39.52, well below the $40.50 strike, the put was in-the-money and assignment occurred. The result: obligation to purchase 100 shares at $40.50 per share, requiring $4,050 in capital that had been secured when the put was sold.
Checking the ThinkOrSwim paper trading account Monday morning revealed the assignment completed over the weekend:
The ThinkOrSwim account now displayed 100 shares of MRVL where previously there was only a short put position. This stock position becomes the foundation for the next phase of the wheel strategy: selling covered calls.
Many traders view assignment negatively, but in the wheel strategy it's actually positive:
The assignment at $40.50 represents a conscious decision to acquire MRVL at that price level. The premium previously collected on the put reduces the true cost basis below $40.50, creating a better entry than simply buying stock at market.
Proper transaction logging transforms chaotic trading activity into organized position tracking. MyATMM provides a structured workflow specifically designed for option seller workflows including assignments.
From the MyATMM dashboard, access the cost basis page for MRVL. This page displays all current positions, active options, and transaction history for this specific ticker. The previous week's cash-secured put should still appear in the active positions section.
Locate the cash-secured put in the active positions list. The position shows:
Click the result dropdown and select "Assigned." This action triggers the assignment workflow:
Assignment Date: January 22, 2023 (date you're logging it)
Assignment Type: Stock (you're receiving stock, not cash settlement)
Shares: 100 (standard contract size)
Assignment Price: $40.50 (same as strike price)
When you click Submit, MyATMM automatically creates a stock purchase transaction at $40.50 per share and marks the put as expired/assigned. This single action properly records both sides of the assignment: the option closing and the stock acquisition.
After submitting the assignment, the cost basis page updates to show:
If you click on the stock position display, a detailed view opens showing the 100 shares acquired at $40.50. However, you'll notice the cost basis might not display yet. This is intentional—the next step completes the record.
The assignment created a stock position but didn't automatically add it to the transaction history. This two-step process prevents accidental duplicate records. To complete the logging:
After saving, the transaction appears in the chronological history list at the bottom of the page. The cost basis information in the stock position section now populates correctly, showing your average cost per share.
The assigned put still appears in the positions list but marked as expired/assigned. MyATMM intentionally retains it temporarily in case you made an error and need to reprocess. Once you've verified the stock acquisition recorded correctly, you can delete this expired put record to clean up the display.
This doesn't delete the original transaction history of selling the put—that remains in the permanent transaction log. It only removes the tracking entry that was monitoring the open position.
With all transactions properly logged, the cost basis page displays comprehensive position information:
| Metric | Description |
|---|---|
| Shares Owned | 100 MRVL shares |
| Total Capital Invested | $4,050 (plus any previous share purchases) |
| Current Stock Price | $39.52 (from market data) |
| Stock Gain/Loss | -$98 unrealized loss ($39.52 current - $40.50 cost × 100 shares) |
| Total Premium Collected | $407 cumulative (all puts and calls ever sold on MRVL) |
| Cost Basis (Simple) | $40.50 (average purchase price) |
| Cost Basis (Premium-Adjusted) | Lower than $40.50 after accounting for $407 in collected premium |
The unrealized loss of $98 looks concerning at first, but the $407 in total premium collected far exceeds this paper loss. The premium-adjusted cost basis shows the true breakeven point is substantially below the $40.50 purchase price.
With the assignment processed and shares owned, it's time to generate income from both directions. The bilateral approach—selling both a covered call above current price and a cash-secured put below current price—guarantees premium collection regardless of whether the stock moves up or down during the week.
When you sell both a covered call and a cash-secured put on the same underlying:
Only one position can lose—if the call is challenged, the put expires worthless, and vice versa. The stock cannot simultaneously be above the call strike and below the put strike at the same expiration.
Current situation: 100 shares of MRVL owned with cost basis of $40.50, stock trading at $39.48 (this is Sunday review, so market is closed but checking Friday's close). The goal is selling a covered call that protects against loss if called away.
Rule: Never sell covered calls below your cost basis, as this creates guaranteed losses if assigned. Instead, select strikes at or above cost basis where assignment generates profit.
Checking the option chain for the next Friday expiration (January 27, 2023), the $40.50 strike—exactly at cost basis—offers $52 premium (mid-point of $0.52 bid and $0.56 ask).
Strike Price: $40.50 (at cost basis)
Premium Available: $52 ($0.52 mid-point × 100 shares)
Days to Expiration: 5 days (weekly expiration)
Outcome if Assigned: Sell shares at $40.50 (breakeven on stock) + $52 premium = $52 profit
Outcome if Expires Worthless: Keep shares + $52 premium, can sell new call next week
Annualized Return: ~96% ($52 profit on $4,050 capital in 5 days)
The $40.50 strike is perfect: it protects against capital loss if shares are called away, generates meaningful weekly premium, and offers excellent returns if the call expires worthless allowing the process to repeat.
In ThinkOrSwim paper trading account, navigate to MRVL options. Find the January 27 expiration and locate the $40.50 strike. Click to sell to open a call.
Order details:
Important note: ThinkOrSwim defaults to 10 contracts in the quantity field. With only 100 shares, selling 10 contracts would create naked call exposure on 900 shares—extremely dangerous. Always verify you're selling only the number of contracts covered by your shares. One contract = 100 shares.
Submit the order with the mid-point limit price. It will queue for Monday market open. Mid-point orders typically fill quickly on liquid weeklies, though you might get filled a penny or two below mid-point depending on market movement at open.
With the covered call establishing upside income, add a cash-secured put for downside income. Current MRVL price: $39.48. Looking for at-the-money or slightly out-of-the-money strikes.
The $39 strike (roughly $0.50 below current price) for January 27 expiration shows $0.73 bid and $0.76 ask, with mid-point at approximately $0.74-$0.75.
Strike Price: $39
Premium Available: $74 ($0.74 mid-point × 100 shares)
Days to Expiration: 5 days (same as covered call)
Buying Power Required: $3,900 (must have this available)
Outcome if Assigned: Purchase 100 more shares at $39, effective cost $38.26 after premium
Outcome if Expires Worthless: Keep $74 premium, can sell new put next week
Return if Expires Worthless: 1.9% in 5 days (~140% annualized)
The $39 strike offers excellent premium for a near-the-money put. If assigned, it adds 100 shares at $39—lower than the current $40.50 cost basis, creating beneficial dollar cost averaging. If it expires worthless, the $74 premium is kept outright.
Back in the ThinkOrSwim option chain, locate the $39 strike put for January 27. Sell to open.
Order details:
Again, verify the quantity is 1 contract, not ThinkOrSwim's default of 10. Submit the order to queue for Monday open.
After placing both orders, check the Monitor tab, then Working Orders section. You should see:
Both orders will attempt to fill when the market opens Monday morning. If filled, you've established complete bilateral coverage: covered call above current price, cash-secured put below current price, guaranteed to collect full premium on at least one side.
Understanding the possible outcomes helps appreciate why this approach works:
| Stock Movement | Covered Call Outcome | Cash-Secured Put Outcome | Net Result |
|---|---|---|---|
| Stays flat ($39-$40) | Expires worthless - keep $52 | Expires worthless - keep $74 | Keep both premiums: $126 total |
| Rallies above $40.50 | Assigned - sell shares at $40.50 | Expires worthless - keep $74 | $52 call + $74 put + breakeven stock = $126 profit |
| Drops below $39 | Expires worthless - keep $52 | Assigned - buy 100 shares at $39 | $52 call + $74 put - potential stock loss on new shares |
In the best case scenario (stock stays between strikes), both expire worthless and you keep both premiums totaling $126. In the worst case scenario (stock drops and put assigns), you still collected $126 in premium and acquired more shares at $39 which can generate future covered call income.
The MyATMM platform includes specific features designed to handle option assignments and ongoing position tracking systematically.
When processing assignments, MyATMM provides:
MyATMM calculates two different cost basis metrics, both valuable for decision-making:
Simple Cost Basis (Dollar Cost Average): Total capital invested divided by total shares owned. For the MRVL position with $4,050 invested in 100 shares, simple cost basis is $40.50 per share. This represents what you actually paid per share on average.
Premium-Adjusted Cost Basis: Simple cost basis minus all premium collected. With $407 in total premium collected, the premium-adjusted cost basis is significantly lower than $40.50. This represents your true breakeven point accounting for income generated from the position.
Both metrics matter: simple cost basis guides strike selection for covered calls (sell at or above to avoid losses), while premium-adjusted cost basis shows true profitability (position is profitable once stock exceeds premium-adjusted basis).
When you have open cash-secured puts, MyATMM displays "proposed cost basis"—what your cost basis would become if those puts are assigned. This forward-looking metric helps evaluate whether accepting assignment at that strike makes sense.
If the proposed cost basis after assignment would be higher than you're comfortable with, you might choose to roll the put instead of accepting assignment. If the proposed cost basis looks attractive, assignment becomes desirable.
Every action creates permanent transaction records:
This chronological history enables you to review every decision, calculate actual returns, and identify patterns in what worked and what didn't. The transaction log becomes your trading journal automatically.
MyATMM tracks your brokerage account balance based on logged transactions. This calculated balance should match your actual brokerage balance exactly. If they don't match, you've missed logging a transaction or made an entry error.
This reconciliation feature catches mistakes immediately rather than discovering them months later when trying to understand why your records don't match your broker statements.
Paper trading allows you to master the wheel strategy mechanics and MyATMM tracking workflows before risking real capital. The experience is nearly identical to live trading, providing complete learning without financial consequences.
Using a paper trading account like ThinkOrSwim, you learn:
While valuable, paper trading has limitations to recognize:
Despite limitations, paper trading builds essential mechanical skills and systematic habits. When you transition to live trading, the workflows are already familiar, reducing the learning curve when real capital is at stake.
The transition from paper to live trading becomes smooth when you:
MyATMM tracks both paper and live accounts identically, so your workflows don't change when transitioning. The same transaction logging, cost basis tracking, and position management processes apply to both account types.
The complete wheel strategy workflow—from cash-secured put assignment through bilateral position establishment—becomes straightforward when executed systematically. Each step builds on the previous: assignment creates stock position, stock position enables covered call, covered call protects capital, cash-secured put creates downside income opportunity. The cycle perpetuates weekly, generating consistent premium collection.
MyATMM transforms this workflow from potentially confusing to organized and trackable. The assignment recording features ensure stock positions correctly reflect put assignments. The dual cost basis calculations show both simple average cost and premium-adjusted true cost. The transaction history creates an audit trail proving every income event. The account reconciliation catches errors before they compound.
The bilateral approach—selling both covered calls and cash-secured puts simultaneously—guarantees premium income regardless of direction. With MRVL trading at $39.48, selling the $40.50 call collected $52 while selling the $39 put collected $74, totaling $126 in premium. The stock cannot simultaneously be above $40.50 and below $39, ensuring at minimum one position expires worthless collecting 100% of its premium.
Paper trading provides the risk-free environment to master these workflows. Assignment mechanics, transaction logging, strike selection, order entry, and weekly position establishment all become familiar through repetition without financial consequences. The habits developed in paper trading translate directly to live trading when you're ready.
The example MRVL position demonstrates sustainable income generation: $407 in total premium collected across multiple assignments and covered calls, reducing true cost basis well below the $40.50 simple average. Even with a $98 unrealized stock loss, the position remains profitable overall thanks to consistent premium collection.
Success in the wheel strategy comes from systematic execution, not market timing or complex analysis. Follow the workflow weekly: process any assignments from the previous week, log all transactions accurately, analyze updated cost basis and metrics, establish new bilateral positions for the coming week. This four-step cycle takes 10-15 minutes and creates the foundation for consistent weekly cashflow that compounds over time.
Options trading involves significant risk and is not suitable for all investors. Selling cash-secured puts obligates you to purchase shares at the strike price if assigned, which can result in substantial losses if the stock declines significantly. Covered calls limit upside potential and do not protect against downside risk beyond the premium received.
Paper trading results do not guarantee similar performance in live trading. Paper trading does not involve financial risk and cannot fully simulate the psychological aspects of trading with real capital. Past premium collection does not guarantee future income.
This content is for educational purposes only and should not be considered financial advice or a recommendation to trade any specific security or implement any particular strategy. Always consult with a qualified financial advisor before making investment decisions.
MyATMM handles assignment workflows, calculates premium-adjusted cost basis, and maintains complete transaction audit trails. Know your true position status at all times.
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