When trading options, assignment is often viewed with apprehension—but for wheel strategy practitioners, it represents an opportunity rather than a setback. Getting assigned on a cash-secured put means you've acquired shares at a predetermined price with a reduced cost basis thanks to premium collection. More importantly, it unlocks the ability to implement bilateral trading: simultaneously selling covered calls against your newly acquired shares while continuing to sell cash-secured puts below your position.
In this comprehensive walkthrough, we'll examine a real-world example using Bath & Body Works (BBWI) where assignment on a cash-secured put enabled a 1.56% return in a single week. You'll see exactly how to track these transactions in MyATMM, calculate adjusted cost basis, and set up new bilateral positions that capitalize on the certainty principle: the stock price can only move in one direction, guaranteeing that at least one side expires worthless.
Before we dive into bilateral trading mechanics, let's review what happened during the assignment event that triggered this strategy.
By Friday, March 8th, BBWI closed at $44.76—below both the $47 covered call strike and the $46 cash-secured put strike. This outcome meant:
This assignment added 100 shares to the existing 100-share position, bringing the total to 200 shares and creating the foundation for bilateral trading.
Accurate cost basis tracking becomes critical after assignment events, especially when managing multiple positions across different entry points. Here's the exact workflow demonstrated in the tutorial.
First, both the covered call and cash-secured put from March 4th needed to be logged into the permanent transaction history:
These transactions moved into the permanent history section, adding to the cumulative premium collection: $145.31 total premiums collected to date.
When the $46 put was assigned on March 9th, the software workflow involves clicking "Do Assignment" on the cash-secured put position:
The assignment automatically created a new stock position record for 100 shares at $46.00, bringing the total position to 200 shares.
MyATMM separates the assignment into the stock position section rather than keeping it linked to the put. This approach provides clarity: the put transaction is complete (premium collected, obligation fulfilled), and the new stock purchase becomes its own discrete entry. This separation makes it easier to track your true cost basis across multiple entry points and calculate returns accurately when eventually liquidating shares.
After processing the assignment, the cost basis summary updated automatically:
Notice the critical distinction: while the stock-only cost basis is $46.50, the cost basis with premium factored in is $43.47—well below the current market price of $44.76. This means despite being "underwater" on pure stock value, the overall position remains net positive by $129 if liquidated immediately.
With 200 shares now owned, the continuous wheel strategy opens up the most powerful income-generation opportunity: playing both sides simultaneously.
The strategy leverages a fundamental market truth: price can only move in one direction. When you sell covered calls above current price and cash-secured puts below current price, at least one side is guaranteed to expire worthless, letting you keep the full premium. Here's how it works:
Unlike directional trading where you profit only if your prediction is correct, bilateral trading generates income regardless of direction. You're not betting on price movement—you're systematically collecting premium while managing your cost basis. This approach transforms volatility from a risk into an income opportunity.
With 200 shares in hand and assignment behind us, it's time to establish new positions for the upcoming week. Let's walk through the exact analysis and trade placement process.
The cost basis (stock only) is now $46.50 per share. To avoid taking a loss on shares, any covered call strike should be at or above $46.50. However, since there's no $46.50 strike available, the nearest strike above cost basis is $47.00.
For demonstration and tracking purposes, the tutorial sticks with weekly options despite the low 0.3% return. In a live trading scenario, extending to 2 weeks for the 1% return would be more efficient. But to maintain consistent weekly video content and transaction tracking, the decision was made to sell the 1-week option.
With 200 shares owned, 2 covered call contracts can be sold:
For the put side, the goal is to sell as close to at-the-money as possible while still collecting reasonable premium. Current price is $44.76, so the $44 strike provides a good balance.
With both orders queued, here's the full position structure going into the week:
The title references a 1.56% return over the past week. Let's break down exactly where that number comes from.
The relevant capital for ROI calculation is the collateral required for the positions:
ROI = (Net Premium ÷ Total Capital) × 100
ROI = ($143.66 ÷ $9,300) × 100
ROI = 1.54%
Note: The video references 1.56%, likely including slight rounding or additional factors. The core calculation demonstrates a weekly return in the 1.5% range, which annualizes to approximately 78% if sustained consistently—though this level of return is not guaranteed and will vary based on market conditions and strike selection.
An important strategic note mentioned in the tutorial: in live trading with real capital, the trader often rolls positions rather than accepting assignment. Let's understand when and why.
Rolling means closing your current position and simultaneously opening a new position with a later expiration date (and often a different strike). You should consider rolling when:
Assignment makes sense when:
The trader mentions rolling positions "as often as possible, for as long as possible" to maximize premium collection before accepting assignment. This approach can generate significantly more premium than simply accepting the first assignment opportunity. Only when premium becomes insufficient (below 1% return in 30 days) does taking assignment make financial sense.
One of the most powerful aspects of the continuous wheel strategy is the way it naturally implements dollar cost averaging while generating income. Each assignment adds shares at progressively lower prices (assuming a downward trend), pulling your average cost basis down.
If BBWI continues moving downward and additional cash-secured puts get assigned, each assignment:
Current Situation:
200 shares, $46.50 average cost basis
If $44 Put Gets Assigned:
300 shares total
New cost basis = (200 × $46.50 + 100 × $44) ÷ 300 = $45.67
If Another $42 Put Gets Assigned:
400 shares total
New cost basis = (300 × $45.67 + 100 × $42) ÷ 400 = $44.75
As cost basis decreases, the strikes you can profitably sell covered calls at also decrease—making it easier to collect premium even in declining markets.
MyATMM includes a "Cost Basis of Puts" calculation that shows what your cost basis would become if currently open cash-secured puts get assigned. This preemptive calculation helps you:
One helpful feature demonstrated in the tutorial is the Preferences section in MyATMM, which allows you to set default commissions and fees.
Instead of manually entering commissions for every transaction, you can configure:
Once configured, these values automatically populate when you create new proposed records, eliminating manual data entry and reducing errors. This feature is especially valuable when managing multiple positions across different tickers and executing frequent weekly trades.
For traders accustomed to directional strategies, option assignment can feel like failure. But for continuous wheel strategy practitioners, assignment represents progress—a transition from single-sided income (puts only) to bilateral income (puts and calls simultaneously).
This BBWI example demonstrates the complete lifecycle:
With proper tracking through MyATMM, you maintain precise visibility into your true cost basis, cumulative premiums, and potential exposure. This clarity enables confident decision-making even as positions grow more complex.
The 1.56% weekly return achieved in this example, while not guaranteed in every market environment, illustrates the income potential of disciplined bilateral trading. By focusing on premium collection over price speculation, the continuous wheel strategy transforms volatility into consistent cash flow.
Options trading involves substantial risk and is not suitable for all investors. Selling cash-secured puts obligates you to purchase shares at the strike price if assigned, potentially resulting in losses if the stock declines significantly. Selling covered calls caps your upside potential if the stock appreciates beyond the strike price. Assignment risk, early assignment, and gaps in stock prices can impact results. This content is for educational purposes only and should not be considered financial advice. Past performance does not guarantee future results. Always consult with a qualified financial advisor before implementing any options trading strategy.
MyATMM automatically calculates your cost basis across puts, calls, assignments, and premiums—giving you complete visibility into every position. Stop guessing, start tracking.
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