SoFi Wheel Strategy Part 3: Covered Calls and Cash-Secured Puts — Play Both Sides

Introduction: Why Play Both Sides of the Wheel?

In Part 2 of our SoFi wheel strategy series, our cash-secured put expired in the money and we got assigned 100 shares of $SOFI at the $14.50 strike price. Now it's time to put those shares to work.

Most wheel traders know the next step after assignment is to sell a covered call against those newly owned shares. But there's an approach that can accelerate your premium income: sell a covered call and a cash-secured put at the same time. By playing both sides of the wheel simultaneously, you're collecting premium whether the stock moves up, down, or sideways.

In this part, we'll walk through exactly how to execute both trades on Thinkorswim, then track everything in MyATMM — including a deep dive into the three cost basis numbers every wheel trader should understand.

Selling the Covered Call on Thinkorswim

With SoFi trading around $14.30, our first move is to sell a covered call against the 100 shares we now own. Since our cost basis on the stock purchase is $14.50, we want to sell the call at or above that strike to avoid locking in a loss if the shares get called away.

We selected the $14.50 strike for the weekly expiration. One thing worth noting: the bid-ask spread was initially showing $0.31 to $1.04 — a massive gap. That $1.04 ask was clearly out of line, and it cleaned up after a moment. We set a limit price at $0.34 (right around the mark price), confirmed the order, and it filled almost immediately.

By selling the covered call at our cost basis strike, we set up a clean scenario: if SoFi closes above $14.50 at expiration, our shares get called away and we break even on the stock — but we keep the $34 premium. If it stays below $14.50, the call expires worthless and we keep both the shares and the premium.

Selling the Cash-Secured Put Simultaneously

Here's where the bilateral approach comes in. Instead of waiting for the covered call to play out before doing anything else, we immediately turn around and sell a cash-secured put on SoFi as well. This means we're collecting premium from two separate positions on the same underlying stock.

We chose the $14.00 strike for the cash-secured put — one strike below the current price — and received $0.23 per share ($23 per contract). This put also expires on the same weekly cycle.

The Possible Outcomes

With both positions open, here's what could happen at expiration:

• Stock above $14.50: Covered call is in the money — shares get called away at $14.50 (breakeven on stock). Cash-secured put expires worthless. You keep both premiums ($34 + $23 = $57).
• Stock between $14.00 and $14.50: Both options expire worthless. You keep your shares and both premiums. This is the ideal scenario.
• Stock below $14.00: Covered call expires worthless. Cash-secured put is in the money — you get assigned another 100 shares at $14.00. You keep both premiums and now own 200 shares at a lower average cost.

Tracking Both Transactions in MyATMM

With both trades executed on Thinkorswim, it's time to record everything in MyATMM. Accurate tracking is what separates disciplined wheel traders from those who lose track of their true position cost over time.

On the cost basis page, with SoFi already selected, we enter each position one at a time:

Entering the Covered Call

1. Click New Position
2. Set the date to June 16 (the date we sold the call)
3. Select Sell to Open
4. Choose Call as the option type
5. Enter 1 contract, $14.50 strike, June 20 expiration
6. Enter the premium: $0.34 ($34 total)
7. Click Save — the position moves into the Calls section

Entering the Cash-Secured Put

1. Click New Position again
2. Same date: June 16
3. Select Sell to Open
4. Choose Put as the option type
5. Enter 1 contract, $14.00 strike, June 20 expiration
6. Enter the premium: $0.23 ($23 total)
7. Click Save — the position moves into the Puts section

Now both positions are represented in the positions in play section — the covered call and the cash-secured put are clearly visible alongside the 100 shares we already own from the original assignment.

Proposed Records and Commission Tracking

After saving those draft positions, MyATMM automatically generates proposed records in a staging area. These proposed records let you account for commissions and fees before committing the transaction to your permanent history.

For example, the covered call proposed record shows: $34.00 (premium) minus $0.50 (commission) minus $0.01 (regulatory fee) = $33.49 in actual credit received. This is the real number that hit your brokerage account — not the headline premium amount.

We did the same for the cash-secured put: $23.00 minus commissions and fees = $22.49 net credit. Both transactions then move into the permanent transaction history, giving us a complete audit trail:

• The original cash-secured put that started the wheel
• The stock assignment (buying 100 shares at $14.50)
• The covered call we just sold ($33.49 net credit)
• The new cash-secured put ($22.49 net credit)

Understanding the Three Cost Basis Numbers

This is where MyATMM really earns its keep. With all transactions recorded, the cost basis page displays three critical numbers that every wheel trader needs to understand. These aren't just arbitrary calculations — they each tell you something different about your position.

1. Cost Basis (Stock Purchase Only)

This is the simplest number: the pure acquisition cost of your shares. In our case, we bought 100 shares at $14.50 through assignment, so our stock-only cost basis is $14.50 per share ($1,450 total).

This number doesn't account for any premium you've collected. It's strictly what you paid for the shares.

2. Cost Basis (With Premiums)

This is where things get interesting. When you factor in all the option premium you've collected over time, your effective cost basis drops significantly. In our SoFi wheel, after collecting premium from the initial put, the covered call, and the new cash-secured put, our net cost basis dropped to $13.43 per share.

3. Cost Basis (With Puts)

This third number is speculative, but incredibly useful for planning. It answers the question: What would my cost basis be if my active cash-secured put gets assigned?

Since we sold a cash-secured put at the $14.00 strike, if SoFi drops below $14.00 by expiration, we'd be assigned another 100 shares at $14.00 each. That means we'd own 200 shares total — 100 at $14.50 and 100 at $14.00. Our average stock cost basis would drop to $14.25 per share.

This is dollar cost averaging in action. By selling puts at lower strikes, you're systematically bringing down your average acquisition cost if you do get assigned.

FIFO Cost Basis: The Fourth Number Explained

There's actually a fourth cost basis number on the page that was added more recently. This one excludes realized gains and losses, showing you the pure acquisition cost of your remaining shares without the distortion that first-in, first-out (FIFO) accounting can introduce.

Why FIFO Can Distort Your Numbers

FIFO is an accounting method where the first shares you bought are considered the first shares you sell. Most brokerages, including Schwab, use FIFO to calculate realized gains and losses. In simple cases, this works fine. But over time, with many buy and sell transactions, FIFO can paint a misleading picture.

Consider this scenario: you buy 100 shares at $50, then later buy more shares that bring your average cost down to $20. If you sell those original shares for $10, FIFO records a $40 per share loss — even though your average cost basis was only $20. That realized loss gets baked into your cost basis calculations and can make your numbers look worse than they actually are.

MyATMM added this fourth calculation to provide a cleaner look at your acquisition cost for traders with extensive position history. It strips out the noise from realized gains and losses so you can see exactly what you paid for the shares you currently hold — no more, no less.

Position Overview and Running Totals

With everything tracked, MyATMM gives you a clear picture of where the SoFi wheel stands after Part 3:

• Shares owned: 100 (from the original cash-secured put assignment)
• Active covered call: $14.50 strike, June 20 expiration
• Active cash-secured put: $14.00 strike, June 20 expiration
• Collateral tied up: $1,400 (for the cash-secured put)
• Total credits collected: $107 (across all transactions in this wheel)

Every transaction from the very first cash-secured put that started this wheel is recorded in the permanent transaction history. That full audit trail is what makes it possible to calculate accurate cost basis numbers — and it's why tracking matters more than most traders realize.

What's Coming in Part 4

In the final installment of this SoFi wheel series, we'll see how these positions played out. Did the stock close above $14.50 and trigger the covered call? Did it drop below $14.00 and assign another 100 shares through the cash-secured put? Or did it land in the sweet spot between both strikes?

We'll review the full cycle results on the MyATMM dashboard, look at the overall performance metrics, and wrap up the series with a complete picture of what the SoFi wheel produced from start to finish.