Managing a portfolio of covered calls and cash-secured puts requires a systematic weekly review process. This article walks through a complete portfolio review, demonstrating how to track put assignments, manage existing positions, and plan new trades based on available capital and cost basis considerations.
Whether you're running the wheel strategy or simply generating income from option premiums, establishing a consistent review routine helps you stay organized, avoid mistakes, and make informed trading decisions. The key is maintaining accurate cost basis records while ensuring every share you own is working to generate premium income.
Key Takeaway: A structured weekly review process ensures you properly account for assignments, track premium income, and position new trades based on accurate cost basis data. This systematic approach prevents costly errors and maximizes the efficiency of your capital.
The first priority in any weekly review is processing put assignments from the previous week's expiration. When put options you've sold finish in-the-money, you'll be assigned shares at the strike price. Tracking these assignments accurately is critical for maintaining correct cost basis records.
In this review, GRAB had two put contracts assigned at the $3.00 strike price. The stock closed slightly below $3.00 (around $2.96), triggering assignment of 200 shares. Here's the proper tracking process:
GRAB Position After Assignment:
This particular week saw three different put assignments across the portfolio:
Each assignment requires removing the put position from active positions, adding the stock purchase record, and adjusting collateral amounts since the capital is now reflected in the stock holdings rather than reserved for the put contracts.
Not all options result in assignment. Many expire worthless, which is the ideal outcome for option sellers. These positions represent pure profit—you collected premium and kept it without any obligation. However, you still need to remove these positions from your tracking system to maintain accurate records.
Profitable Expirations This Week:
These small premium amounts add up over time. While $5 or $15 might not seem significant on individual trades, consistent weekly income from multiple positions creates meaningful portfolio returns. The key advantage is that you earned this income regardless of stock price movement—as long as the option expired worthless, you profited.
After processing assignments and clearing expired positions, the next critical step is understanding how much buying power remains available for new trades. Put assignments consume capital, which directly impacts your ability to open new cash-secured put positions.
Capital Constraint This Week: After three put assignments totaling significant capital deployment, available buying power dropped to just $2,600. This limited flexibility for opening new put positions, particularly on higher-priced stocks like NVAX (requiring $1,600 per contract) and RUM (requiring approximately $900 per contract).
When capital becomes constrained, prioritize these actions:
The goal is to keep all shares working by selling covered calls against every stock position while selectively selling puts only where capital allows and the strike price supports your overall strategy.
With assignments processed and capital assessed, you can now plan new option positions. The strategy balances generating premium income against managing cost basis and avoiding trades that could result in losses.
RUM provides a good example of bilateral trading (selling both calls and puts on the same underlying stock):
The $9.50 put strike is below the current $12.00 cost basis, meaning any assignment would further reduce the average share price. Collecting $0.70 premium on this put provides immediate income while positioning for better cost averaging if assigned.
NVAX presents a more challenging scenario due to recent price volatility. The stock dropped from around $19 to $16 in just four trading days during a holiday-shortened week.
NVAX Volatility Considerations:
For volatile stocks like NVAX, analyzing option Greeks helps assess risk before selling calls below cost basis. The key metrics to review are:
For the $28.50 strike (cost basis target), probability showed only 1.39% chance of reaching that level. Even at the $23.50 break-even level, probability remained under 2%. This extremely low probability reflects the significant gap between current price ($16.50) and the target strike prices.
Rather than selling calls at a strike with near-zero probability (and near-zero premium), the strategy shifted to:
One of the most powerful aspects of selling cash-secured puts in a declining stock is the opportunity to continuously lower your average cost basis. While unrealized losses can feel discouraging, the strategy focuses on the long-term benefit of acquiring shares at progressively lower prices.
The NVAX position demonstrates this principle in action:
Key Insight: By selling puts at $16.50 (versus the previous $19 assignment), you're positioning to buy shares at a 13% discount to the last assignment price. If assigned, this $16.50 purchase blends with existing $28 cost basis shares, pulling the overall average significantly lower.
This strategy works best when you believe in the long-term viability of the underlying company. Critical questions to ask:
If you're confident the company won't go bankrupt, every assignment at a lower price mathematically improves your position. When the stock inevitably recovers (and all stocks fluctuate up and down over time), your break-even point becomes much more attainable.
After handling assignments and planning major new positions, the final step is reviewing every remaining position in the portfolio to ensure maximum capital efficiency.
The MO position represents a shift in strategy—rather than maximizing premium, the goal is simply to exit without loss:
This trade illustrates an important principle: not every position needs to generate significant premium. Sometimes the best move is accepting a small premium just to exit a position that no longer fits your strategy.
For GRAB, limited capital and pricing constraints led to a creative solution:
While the per-contract premium appears small, this setup creates a range-bound strategy. If the stock stays between $2.50 and $3.50 over three weeks, both options expire worthless and you keep the full $20 premium. The extended time frame compensates for the low per-week premium by increasing probability of success.
Throughout this weekly review, one tool proved indispensable: the cost basis tracking platform. Every decision—from which strikes to sell, to whether to accept assignment—depends on knowing your true cost basis across all transactions.
Manual Tracking Challenges: Managing cost basis across assignments, premium collections, and multiple transaction types becomes exponentially complex in spreadsheets. Small errors in formulas or missed transactions can lead to selling calls at strikes that actually result in losses.
MyATMM automatically handles these calculations, ensuring you always know your true cost basis before placing any trade. The platform tracks premiums collected, assignments received, and adjusts cost basis in real-time as transactions occur.
After completing all assignments, clearing expired positions, and opening new trades, here's the portfolio status:
| Position | Status | Action Taken |
|---|---|---|
| GRAB | 200 shares | Sold 2 calls + 1 put (3 weeks) |
| RUM | 300 shares | Sold 2 new calls + 1 put |
| NVAX | 300 shares | Sold 3 calls (3 weeks) + 1 put |
| MO | 100 shares | Sold 1 call (break-even exit) |
| CLOV | 400 shares | All shares covered (no action) |
| MVIS | 200 shares | All shares covered (no action) |
Available Buying Power: $259 remaining after all new positions opened
Portfolio Status: All shares now have covered calls working, selective puts opened where capital and strategy support it
The weekly review doesn't end with placing trades. Several follow-up actions ensure successful execution:
Throughout the week, monitor positions for potential adjustment opportunities:
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, which can result in significant capital requirements and potential losses if the stock declines substantially. Selling covered calls caps your upside potential and you may be forced to sell shares below your desired price. Past performance shown in examples does not guarantee future results. This content is for educational purposes only and should not be considered financial advice. Always consult with a qualified financial advisor before making investment decisions and only trade with capital you can afford to lose.
Stop wrestling with spreadsheets. MyATMM automatically tracks cost basis across all your covered calls, cash-secured puts, and assignments—so you always know exactly where you stand before placing your next trade.
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