Assigned Cash-Secured Put: Bilateral Trading Strategy with MRVL Continuous Wheel

Introduction: Turning Assignment Into Opportunity

Getting assigned on a cash-secured put isn't a problem to avoid—it's an opportunity to implement the next phase of systematic income generation. When you sell cash-secured puts as part of a deliberate wheel strategy, assignment represents the planned transition from collecting premium on the put side to establishing a full bilateral trading position with both covered calls and cash-secured puts working simultaneously.

The continuous wheel strategy extends beyond traditional wheel approaches by maintaining positions on both sides of the market after assignment occurs. Rather than waiting for shares to get called away before selling new puts, you immediately establish both a covered call on the assigned shares and a new cash-secured put at current market levels. This bilateral approach generates income regardless of direction while systematically reducing cost basis through dollar cost averaging.

This article walks through a real assignment on Marvell Technology (MRVL), demonstrating the complete workflow: tracking the assignment in your brokerage account, logging the transaction properly in MyATMM cost basis tracking, analyzing the updated position metrics, and setting up the bilateral positions—both a covered call against the newly acquired shares and a new at-the-money cash-secured put to continue playing both sides of the trade.

Understanding the Assignment: What Actually Happened

Before implementing bilateral positions, you need to fully understand what the assignment represents and how it affects your capital, position, and future trading capacity.

The Original Put Sale

The position began with a straightforward cash-secured put sale on MRVL. The specific transaction details:

Parameter	Value
Trade Date	February 6th
Strike Price	$46.50
Expiration	February 11th
Premium Collected	$165.00
Duration	5 days
Return on Capital	3.55% (5 days)

This put required $4,650 in buying power (strike price × 100 shares per contract). The $165 premium represented 3.55% return for just five days of exposure, or approximately 260% annualized. These numbers demonstrate why selling puts on moderately volatile stocks generates meaningful income in short timeframes.

Assignment Mechanics

On February 11th (expiration Friday), MRVL's stock price closed below the $46.50 strike price. The option expired in-the-money, triggering automatic assignment. Here's what happened mechanically:

1. Obligation Executed: The cash-secured put obligated you to purchase 100 shares at $46.50 per share
2. Capital Deployment: $4,650 moved from cash to equity (100 shares × $46.50)
3. Share Acquisition: 100 shares of MRVL appeared in the account
4. Put Position Closed: The short put position disappeared from the open positions list
5. Settlement Date: Assignment settled on Saturday, February 11th (unusual weekend settlement)

The brokerage account statement clearly showed both the original put sale on February 6th and the assignment execution on February 11th, creating a complete audit trail of the transaction sequence.

Effective Cost Basis Calculation

While the assignment occurred at $46.50, the effective cost basis differs because of the premium collected upfront. The accurate calculation:

This $44.85 effective cost basis becomes critical for all future decision-making. It represents the true breakeven point and informs strike selection for covered calls. The market doesn't need to reach $46.50 for you to break even—it only needs to reach $44.85, giving you a $1.65 per share cushion.

Capital Impact Assessment

Understanding how assignment affects your overall capital allocation and available buying power is essential before establishing new positions:

• Cash Reduction: $4,650 moved from cash to equity
• Margin Impact: If using margin, buying power increased (equity typically provides 50% margin value)
• Available for New Puts: Remaining cash determines how many additional cash-secured puts can be sold
• Covered Call Capacity: 100 shares enables selling 1 covered call contract

In this case, the paper trading account showed ample remaining capital to continue the strategy on both sides. With assignment confirmed and capital impact understood, it's time to log the transaction and set up bilateral positions.

Tracking the Assignment in MyATMM

Accurate transaction logging is the foundation of successful option trading. Without precise records, you cannot know your true cost basis, track performance accurately, or make informed decisions about future positions. MyATMM provides the systematic workflow for recording assignments correctly.

Step 1: Navigate to Cost Basis Page

Begin by accessing the cost basis tracking page for MRVL. Since this was the only position being tracked at the time, filtering made the display clean and focused. For accounts tracking multiple tickers, the filter feature ensures you're viewing only the relevant position.

Step 2: Mark the Put as Assigned

The cash-secured put that was originally logged when sold now needs to be updated to reflect the assignment. The specific workflow:

1. Locate the open put position ($46.50 strike, February 11th expiration)
2. Change the result status from "Open" to "Assigned"
3. Select assignment type: "Stock" (as opposed to a spread or other derivative)
4. Enter the assignment details:
   • Shares: 100 (one contract = 100 shares)
   • Assignment Price: $46.50 (strike price of the put)
5. Submit the assignment transaction

When you click submit, MyATMM automatically performs several actions. It moves the put from the active positions section to the transaction history, creates a stock purchase record for 100 shares at $46.50, and updates the position counter showing you now own shares in MRVL.

Step 3: Generate Stock Purchase Record

The assignment process creates the stock position, but you need to save this record to the permanent transaction history. This is a critical step that's easy to miss. Here's why it matters:

Simply marking a put as assigned and submitting doesn't automatically create the comprehensive transaction record needed for reporting and reconciliation. You must explicitly save the stock purchase entry to generate the full audit trail showing date, share count, price, fees, and net capital deployment.

After saving this record, the transaction history now shows both the original put sale (credit of $165) and the stock purchase from assignment (debit of $4,650), creating a complete record of the entire transaction sequence.

Step 4: Verify Updated Position Metrics

With the assignment fully logged, MyATMM displays comprehensive position metrics that tell the complete story of your MRVL position:

Metric	Value
Shares Owned	100
Current Stock Price	$44.55
Current Position Value	$4,455
Capital Invested	$4,650
Unrealized Loss	-$195
Total Premium Collected	$809
Cost Basis (Simple)	$46.50
Cost Basis (Premium-Adjusted)	$38.41

These numbers reveal the power of the continuous wheel strategy. While the position shows a $195 unrealized loss based on current stock price versus simple cost basis, the premium-adjusted cost basis of $38.41 tells the real story. The cumulative $809 in premium collected across all MRVL transactions has reduced the true breakeven point from $46.50 to $38.41—a $8.09 per share cushion.

This means MRVL could trade as low as $38.41 and the overall position would still be at breakeven when accounting for all premium collected. That's the continuous wheel strategy working exactly as designed: consistently reducing cost basis through systematic premium collection while maintaining the ability to generate income in any market direction.

Setting Up Bilateral Positions: Playing Both Sides

With the assignment processed and tracked, it's time to implement the bilateral component of the continuous wheel strategy. You now own 100 shares, creating two distinct income opportunities that work simultaneously but independently.

Why Bilateral Trading Works

The brilliance of bilateral positioning is that the stock can only move in one direction over any given timeframe. It either goes up, goes down, or trades sideways. Each scenario benefits you:

• Stock Rises: Covered call gets challenged or assigned, you sell shares at profit and keep the call premium
• Stock Falls: Cash-secured put gets assigned, you buy more shares at lower price (dollar cost averaging) while covered call expires worthless and you keep that premium
• Stock Sideways: Both positions expire worthless, you keep both premiums, and you repeat the process the following week

Only one side can execute in a given expiration cycle, but both sides collect premium. This creates continuous income regardless of direction while systematically building your position through assignments at progressively lower cost basis levels.

Selecting the Covered Call Strike

With 100 shares owned at an effective cost basis of $44.85 (accounting for the put premium), the covered call strike selection focuses on the simple cost basis of $46.50. This is the actual assignment price and represents the target for potential share sale.

Checking the option chain for the February 17th expiration (5 days away), the $46.50 strike showed:

Parameter	Value
Strike	$46.50
Days to Expiration	5
Bid	$0.63
Ask	$0.68
Spread	$0.05
Midpoint	$0.655
Target Limit Order	$0.65

The $46.50 covered call offered $65 in premium for five days of exposure. This represents income on shares you already own, with no additional capital required. If MRVL rallies above $46.50, the shares get called away at exactly the price you paid (before premium), meaning you break even on the share trade but keep $165 (put premium) + $65 (call premium) = $230 total premium collected.

Selecting the Cash-Secured Put Strike

The continuous wheel strategy calls for selling an at-the-money cash-secured put to continue building the position if the stock declines. Current MRVL price: $44.55. The nearest at-the-money strike is $44.50.

The $44.50 put for February 17th expiration showed:

Parameter	Value
Strike	$44.50
Days to Expiration	5
Bid	$1.31
Ask	$1.35
Spread	$0.04
Midpoint	$1.33
Target Limit Order	$1.33

This $133 premium for the cash-secured put significantly exceeds the $65 covered call premium because the put is at-the-money (near current price) while the call is out-of-the-money ($46.50 strike vs $44.55 current price). The at-the-money put carries higher probability of assignment and therefore commands higher premium.

The Combined Position Dynamics

With both positions in place, here's what happens over the next five days based on MRVL's price movement:

The beauty of this bilateral structure is that two of the three scenarios (rally or sideways) result in pure premium collection with no additional capital deployment. Only the downward scenario requires buying more shares, which actually benefits the strategy by lowering cost basis through dollar cost averaging while increasing future covered call capacity.

Understanding Cost Basis Dynamics

The true power of the continuous wheel strategy becomes clear when analyzing how cost basis evolves through successive assignments and premium collection. This isn't just about generating income—it's about systematically transforming a potentially losing position into a winning one through disciplined execution.

Simple Cost Basis vs. Premium-Adjusted Cost Basis

MyATMM tracks two distinct cost basis metrics, and understanding both is critical for informed trading decisions:

Simple Cost Basis ($46.50 in this example): The average price paid for shares without accounting for option premium. This represents the traditional cost basis that brokerages report and the IRS uses for tax calculations on share sales. It's the baseline from which unrealized gains and losses are calculated.

Premium-Adjusted Cost Basis ($38.41 in this example): The average share purchase price reduced by all option premium collected on that ticker. This represents your true economic breakeven point—the price level where total premium collected equals any unrealized loss on the shares. It's the number that determines whether your overall strategy is profitable.

In the MRVL position, the $8.09 difference between these two numbers ($46.50 - $38.41 = $8.09) represents $809 in total premium collected divided by 100 shares owned. That premium creates an economic cushion allowing the stock to decline substantially before the overall position becomes unprofitable.

How Dollar Cost Averaging Accelerates Cost Basis Reduction

Each assignment at a lower price creates mathematical cost basis reduction beyond just the premium collected. Consider what happens if the $44.50 cash-secured put gets assigned:

This $1.00 per share reduction happens automatically through dollar cost averaging. You're buying the second lot at $2.00 below the first lot's price, pulling the average down. When combined with premium collection from both the call and the put, the economic cost basis drops even more dramatically.

If you add the $65 call premium and $133 put premium to the equation ($198 total for this cycle), the premium-adjusted cost basis on 200 shares would drop below $38 per share. The continuous wheel strategy compounds these effects over multiple cycles, systematically building a position at lower and lower effective costs.

Premium Collection as Downside Protection

Every dollar of premium collected creates downside protection. In the MRVL example, the $809 in total premium collected means the stock can drop from $46.50 to $38.41 ($8.09 decline, or 17.4%) before the overall position reaches actual breakeven.

This protection compounds with each successive premium collection event. Every covered call that expires worthless adds to the cushion. Every cash-secured put premium reduces effective cost basis. Over time, the cumulative premium can exceed the current unrealized loss on shares, creating a net profitable position even when the stock has declined significantly from original purchase levels.

This transforms options income from tactical premium collection into strategic position management. You're not just generating income—you're actively engineering lower breakeven points that increase the probability of eventual profitability as the stock cycles through normal volatility.

How MyATMM Simplifies Complex Position Management

Implementing the continuous wheel strategy with bilateral positions creates substantial transaction volume and complex cost basis calculations. Without systematic tracking, errors multiply and decision-making suffers. MyATMM provides the infrastructure that makes this strategy practical.

Assignment Tracking Workflow

The platform's assignment tracking feature demonstrated in this MRVL example shows the structured approach needed for accurate record-keeping:

• Mark open positions as assigned with specific assignment details (shares, price, date)
• Automatic generation of stock purchase records linked to the original option sale
• Transaction history entries that show both the option and the resulting stock transaction
• Position counters that update automatically showing current share holdings
• Cost basis recalculation incorporating both new share purchases and associated premium

This workflow eliminates manual calculations and prevents the errors that compound when tracking positions across weeks and months of continuous trading.

Commission and Fee Tracking

The updated MyATMM platform includes dedicated fields for commissions and fees on every transaction type. While the demo account in the example didn't incur fees, real trading includes per-contract commissions and regulatory fees that affect net premium collection.

The platform allows setting default commission and fee values in preferences, automatically populating these fields for new transactions while remaining fully editable for specific situations. This precision ensures your premium-adjusted cost basis reflects actual net cash collected, not gross premium before fees.

Proposed Cost Basis Calculations

When you have open cash-secured puts, MyATMM can calculate proposed cost basis—what your average cost would become if those puts are assigned. This forward-looking visibility helps evaluate whether accepting assignment aligns with your cost basis reduction goals.

In the MRVL example, before establishing the $44.50 put, you could see that assignment would reduce simple cost basis from $46.50 to approximately $45.50, helping confirm that the trade supports the overall strategy objective of systematically lowering average cost.

Account Reconciliation

MyATMM maintains running account balance calculations based on all logged transactions. This calculated balance should match your brokerage account exactly. In the example, both showed $75,274 (in the paper trading demo account), confirming every transaction had been accurately recorded.

When these numbers don't match, you immediately know a transaction was missed or entered incorrectly. This real-time reconciliation prevents small errors from compounding into major discrepancies that take hours to untangle later.

Conclusion: Assignment as Strategic Opportunity

Getting assigned on a cash-secured put shouldn't trigger panic or regret—it's the planned transition that activates the full power of the continuous wheel strategy. Assignment creates the opportunity to implement bilateral trading, where both covered calls and cash-secured puts work simultaneously to generate income regardless of market direction.

The MRVL example demonstrates the complete workflow: recognizing the assignment in your brokerage account, logging it accurately in MyATMM with proper cost basis calculations, and immediately setting up bilateral positions that create multiple income streams. The $65 covered call and $133 cash-secured put generate $198 in premium over just five days on a position that already collected $165 in premium from the original put sale.

The continuous wheel strategy's true power emerges over time through cost basis reduction. The premium-adjusted cost basis of $38.41 versus simple cost basis of $46.50 shows how systematic premium collection creates an $8.09 per share economic cushion. As more cycles complete and more premium is collected, this cushion expands, transforming potentially losing positions into profitable strategies even when the underlying stock has declined.

Bilateral positioning ensures only one side executes in any given cycle, but both sides collect premium. If the stock rallies, shares get called away at profit. If it declines, more shares are acquired at lower cost through dollar cost averaging. If it trades sideways, both positions expire worthless and both premiums are kept. Every scenario generates income or reduces cost basis or both.

MyATMM makes this complex strategy practical by providing systematic assignment tracking, accurate cost basis calculations accounting for all premium collected, and account reconciliation that catches errors immediately. Without this infrastructure, the continuous wheel strategy remains theoretical. With proper tracking, it becomes an executable system for consistent income generation.

Stop viewing assignment as a problem to avoid. Start seeing it as the strategic opportunity that converts single-sided premium collection into bilateral income generation. Track every transaction, calculate cost basis accurately, and play both sides systematically. The continuous wheel strategy works through consistent execution over time, and assignment is the mechanism that makes it work.