Managing a portfolio of covered calls and cash-secured puts requires a systematic approach, especially when you're running multiple positions across several stock symbols. This comprehensive weekly review demonstrates how to efficiently manage option positions using Robinhood, covering everything from removing expired contracts to opening new positions strategically.
The weekly review process is critical for option sellers practicing the wheel strategy. It ensures you stay organized, capture all premium opportunities, and maintain accurate cost basis tracking across your entire portfolio. Whether you're managing five positions or fifty, having a structured workflow prevents missed opportunities and costly errors.
The first step in any weekly review is cleaning up your tracking system by removing all options that expired worthless the previous Friday. This creates a clean slate for analyzing your current positions and identifying new opportunities for the upcoming week.
Navigate to the cost basis section of your tracking platform and enable the "Only Positions" filter. This filter is invaluable because it displays only the stock symbols where you currently own shares or have active option positions, making it easy to quickly navigate through your portfolio without wading through every ticker you've ever tracked.
Position: Two call contracts on MVIS that expired Friday
Strike Price: Expired worthless (out-of-the-money)
Premium Collected: $2.00 total (pocketed as profit)
Action: Remove both expired contracts from the tracking system
Result: $2.00 in pure premium income added to total returns
Go through each ticker systematically, checking expiration dates against the current week. For this review, positions expiring December 16th (the upcoming Friday) remain active, while any contracts that expired the previous week need to be removed. This includes:
After removing expired positions, the next step is determining which shares need new covered call contracts. Start by reviewing your current stock holdings and comparing them to your active call positions to identify any gaps in coverage.
For each stock symbol where you own shares, verify you have sufficient call contracts to cover your entire position. Remember that one call contract covers 100 shares, so if you own 400 shares, you need four call contracts to fully cover your position.
Shares Owned: 400 shares total
Purchase Prices:
Overall Cost Basis: $3.48 per share
Current Active Calls: None (contracts just expired)
Action Needed: Sell new covered call contracts to re-establish income stream
When you've acquired shares at different prices through multiple cash-secured put assignments, you face an important decision: sell calls at your overall cost basis, or structure contracts at different strike prices matching your specific share lots.
The tiered approach allows you to potentially capture more premium by selling some contracts at lower strikes (matching lower-cost shares) while protecting against loss on higher-cost shares by using higher strikes. However, this added complexity requires more tracking and creates challenges when positions are assigned.
Strike price selection is one of the most critical decisions in covered call selling. Your strike price determines your maximum profit potential and directly impacts the premium you collect. The general rule is to target strikes at or above your cost basis to avoid realizing losses if assigned.
Your overall cost basis represents the average price you've paid for shares, adjusted for any option premiums collected. When your overall cost basis is $3.48, ideally you'd target a $3.50 strike to exit at a small profit while keeping all collected premiums.
However, on lower-priced stocks, the "at cost basis" strike often pays minimal premium. When the $3.50 strike only offers $0.01 per share ($1.00 per contract) in premium, you need to evaluate whether that income justifies tying up your shares for the week.
Current Stock Price: $2.87
Overall Cost Basis: $3.48
Available Strike Prices:
Strategic Decision:
Total Premium: $18.00 total income for the week
When selling covered calls at different strikes, Robinhood requires separate orders for each strike price. While it would be convenient to execute everything in one transaction, the platform gets confused when you try to combine different strikes for the same expiration date.
The safest approach is to place one order at a time, starting with whichever strike you want to prioritize. After the first order is queued or filled, proceed with the second strike. This prevents order confusion and ensures each contract is properly matched to your share position.
One of the most powerful aspects of the wheel strategy is the ability to generate income whether stocks move up or down. After establishing covered calls on your shares, the next step is selling cash-secured puts at strikes below the current price to capture additional premium and potentially acquire more shares at favorable prices.
This approach might seem counterintuitive at first. Why would you want to acquire more shares when you already own a position? The answer lies in the income-generating nature of option selling and the long-term cost basis reduction strategy.
By selling puts while also holding covered calls, you create a bilateral income stream. The stock can only move in one direction during any given week - either the calls win (stock rises), the puts win (stock falls), or both expire worthless (stock stays relatively flat). In all three scenarios, you collect premium income.
Current Stock Price: $2.87
Active Covered Calls: 4 contracts covering all 400 shares
Put Strike Selection: $2.50 (first strike below current price)
Put Premium: $0.02 bid / $0.07 ask (targeting $0.04 at mark)
Collateral Required: $250 (100 shares × $2.50 strike)
Risk/Reward: Collect $4.00 premium for accepting obligation to buy 100 shares at $2.50
When you run both covered calls and cash-secured puts on the same underlying stock, you create three possible profitable outcomes:
This is why bilateral trading is so effective for option sellers. The stock must make a significant move in one direction to trigger assignment, and even when assignments occur, they're often beneficial because they either lock in profits (call assignment) or lower your cost basis (put assignment).
As you practice the wheel strategy over time, you'll accumulate shares at different prices through various cash-secured put assignments. Managing these multi-lot positions efficiently becomes crucial for maximizing premium while maintaining clear cost basis tracking.
The RUM position demonstrates how positions can become complex over time. Starting with 500 shares acquired at different prices creates both opportunities and challenges for covered call management.
Total Shares: 500 shares
Share Lot Details:
Overall Cost Basis: $10.70 per share
Current Stock Price: $7.78
Target Exit Strike: $11.00 (based on overall cost basis)
Challenge: $11 strike pays no premium on weekly options
When you have multiple lots purchased at the same price, consolidating them simplifies your tracking without losing important cost basis information. In the RUM example, two separate 100-share lots were both purchased at $10.00, so combining them into one 200-share lot at $10.00 maintains accuracy while reducing clutter.
The trade-off is losing the specific purchase dates for each lot, but for option sellers focused on cost basis rather than tax lot management, this simplification often proves worthwhile. You maintain the same overall cost basis ($10.70) while making it easier to visualize which share lots can support different strike prices.
When your target strike (based on overall cost basis) pays insufficient premium, you can implement a tiered approach by selling contracts at different strikes matching your different share lots:
This approach captures significantly more premium ($30-40 total) than trying to sell all contracts at the $11 strike (which pays nothing). The risk is that if the stock rallies strongly, you'll be assigned at different prices, requiring careful tracking to understand your actual profit/loss on the closed positions.
One of the realities of running multiple positions is that you won't always have sufficient capital to execute every trade you'd like to make. Strategic capital allocation becomes essential when you're managing cash-secured put positions that require significant collateral.
The NVAX position illustrates a common scenario: you've established covered calls on your shares, and you'd like to sell cash-secured puts to play both sides, but you lack sufficient buying power to support the put collateral.
Shares Owned: 300 shares (fully covered with call contracts)
Current Price: $16.50
Desired Put Strike: $16.50 (at-the-money for maximum premium)
Put Premium Available: $1.00 ($100 per contract)
Collateral Required: $1,650 per contract
Available Capital: $1,000
Decision: Skip the NVAX put this week, deploy capital to other opportunities
When you can't afford the at-the-money strike, you might consider lower strikes that require less collateral. A $10 strike on NVAX would only require $1,000 in collateral, which fits within the available capital.
However, the $10 strike (significantly below the current $16.50 price) only pays $3.00 in premium. While $3.00 income on $1,000 collateral represents a 0.3% return for the week (not terrible on an annualized basis), it's far less attractive than the $100 premium available at the at-the-money $16.50 strike.
This specific situation occurred because capital was being transferred from Robinhood to thinkorswim (TD Ameritrade's platform). While Robinhood offers a streamlined, user-friendly interface ideal for beginners, more advanced traders often migrate to platforms like thinkorswim that offer superior position grouping, analysis tools, and reporting capabilities.
Understanding the long-term cost basis reduction strategy is crucial for maintaining confidence when stocks move against you. This philosophical approach transforms what might feel like losing positions into systematic income opportunities.
Traditional dollar-cost averaging involves buying shares at regular intervals regardless of price, with the goal of achieving a favorable average cost over time. The wheel strategy implements a similar concept, but with two key advantages:
Initial Position: 100 shares at $10.00 (cost basis $10.00)
Stock Falls to $7.50: Sell cash-secured put at $7.50, collect $30 premium, get assigned
New Position: 200 shares, blended cost basis $9.65 (includes premium)
Weekly Covered Calls: Collect $0.15-$0.30 per share weekly ($30-$60 on 200 shares)
After 10 Weeks: Cost basis reduced to $8.15-$8.65 from call premium alone
Recovery Threshold: Stock only needs to reach $8.50-$9.00 for breakeven vs. original $10.00
The key insight driving this strategy is that stocks don't fall forever unless the company is heading toward bankruptcy. Quality companies with real businesses, revenue, and viable products experience volatility, but they also tend to find support levels and eventually recover.
By continuously lowering your cost basis through premium collection, you're dramatically increasing the probability that the stock will eventually trade above your break-even point. A stock that needs to recover from $10 to breakeven has a much harder path than one that only needs to reach $7-$8 because you've collected $2-$3 in premium while it declined.
The cost basis reduction approach has one critical vulnerability: company bankruptcy or permanent value destruction. If you're practicing this strategy on a company that's genuinely failing - burning through cash, losing market share, facing obsolescence - then accumulating more shares at lower prices simply compounds your losses.
RUM (Rumble) serves as a perfect example of applying this philosophy. As a relatively new public company providing video platform services, Rumble faces competition from YouTube and other established players. However, the company has real users, growing engagement, and a viable business model.
When RUM trades at $7.78 with a cost basis of $10.70, the traditional investor might panic. But the option seller sees opportunity: sell puts at $7.50 to potentially acquire more shares while collecting premium, and sell calls at various strikes to generate income while waiting for recovery. As long as you believe Rumble isn't going bankrupt, the probability of it recovering to $9-$10 at some point exceeds the probability of it going to zero.
After working through all positions - removing expired contracts, analyzing cost basis, selling new covered calls at appropriate strikes, and establishing cash-secured puts for bilateral coverage - the final step is ensuring all orders are queued and your tracking system is updated.
By the end of this weekly review session, the following positions were established or maintained:
It's important to understand that not all queued orders will fill immediately Monday morning when the market opens. Option markets can be less liquid than stock markets, especially on lower-priced stocks or during the first hour of trading.
As orders fill throughout the day, update your cost basis tracking system to reflect the new positions. This is critical because your tracking system serves as your source of truth for understanding:
Having accurate data in your tracking system enables you to make informed decisions during the next weekly review, understanding exactly where you stand on each position and what strikes make sense given your cost basis.
Managing multiple wheel strategy positions manually - tracking cost basis across different share lots, recording every option trade, calculating the impact of assignments - quickly becomes overwhelming as your portfolio grows. This is where purpose-built cost basis tracking becomes invaluable.
MyATMM automatically adjusts your cost basis as you enter each transaction - stock purchases, option premium collected, assignments, and dividend payments all factor into your true cost per share. You don't need to manually calculate weighted averages or figure out how a $70 put premium impacts your cost basis on 100 shares.
The "Only Positions" filter demonstrated in this tutorial shows exactly which tickers currently have active positions, eliminating the need to scroll through your entire watchlist. You instantly see which stocks need attention during your weekly review.
When your covered calls or cash-secured puts get assigned, MyATMM tracks the transaction and updates your share count and cost basis accordingly. You maintain a clear record of every assignment, including the date, strike price, and premium involved.
The weekly review process demonstrated here - systematically removing expired positions, analyzing cost basis, selecting appropriate strikes, and establishing bilateral coverage - forms the foundation of successful wheel strategy execution.
While the process might seem time-consuming at first, it becomes significantly faster with practice and proper tools. Most experienced option sellers complete their weekly reviews in 20-30 minutes once they've established their routine and have reliable tracking systems in place.
The key is consistency. Performing this review every week, without exception, ensures you capture every premium opportunity, avoid letting positions go unmanaged, and maintain accurate records that enable informed decision-making.
Whether you're managing five positions like this example or fifty, the principles remain the same: remove expired contracts, identify coverage gaps, select strikes based on cost basis, and balance both sides for maximum income generation. Master this weekly cycle, and you'll build the foundation for sustainable option income.
Options trading involves significant risk and is not suitable for all investors. Covered calls cap your upside potential, and cash-secured puts obligate you to purchase shares at the strike price regardless of how far the stock falls. The wheel strategy can result in accumulating large positions in declining stocks if not managed carefully.
Past performance does not guarantee future results. The examples shown in this article are for educational purposes only and should not be considered recommendations to buy or sell any specific securities. Stock prices can fall significantly more than anticipated, resulting in substantial losses even when collecting premium.
Always conduct thorough research on any company before selling options on its stock, understand the capital requirements for cash-secured puts, and never risk more than you can afford to lose. Consider consulting with a qualified financial advisor before implementing options strategies.
Stop struggling with spreadsheets and manual cost basis calculations. MyATMM automatically tracks your covered calls, cash-secured puts, assignments, and premium income - giving you clear visibility into every position.
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