Getting assigned on a cash-secured put means you now own 100 shares of stock, and your cost basis is not the strike price — it's the strike price minus the premium you collected. That distinction matters more than most new traders realize.
Here's the simple formula:
Cost Basis = Strike Price − Premium Collected Per Share
Let's make this concrete. Say you sold a $150 cash-secured put on AAPL and collected $3.00 in premium. You get assigned. Your cost basis per share is $150 − $3.00 = $147.00. You now own 100 shares of AAPL with a total cost basis of $14,700, not $15,000. That $300 premium you collected already reduced your effective purchase price the moment you received it.
This is one of the genuinely satisfying parts of the wheel — you're always buying stock at a discount to the strike price, assuming you kept the full premium.
What about partial premium? What if you bought back the put first?
Good question. If you sold the $150 put for $3.00 and then bought it back for $1.50 before expiration, your net premium collected is $1.50. If you later sell another put on the same ticker and get assigned on that one, you start the cost basis calculation fresh from that contract's strike and premium. Each assignment is its own event. Don't try to chain multiple contracts together into one cost basis calculation — that gets confusing fast and your broker won't do it that way either.
Commissions factor in too
If you paid $0.65 commission to open the put and $0.65 to get assigned (brokers like Tastytrade charge assignment fees, usually around $5-$10 per contract), those costs technically add to your cost basis. In practice, most traders ignore the commission piece because it's a few cents per share on a 100-share lot. But if you're trading on a platform that charges $10 per assignment, that's $0.10 per share — worth knowing, not worth obsessing over.
Why does this number actually matter?
Two reasons. First, it tells you your real breakeven. If your cost basis on AAPL is $147, the stock needs to trade below $147 before you're actually losing money on the position — not below $150. That's psychologically and practically important when you're deciding whether to hold, sell covered calls, or exit.
Second, it matters for taxes. When you eventually sell the shares (either on the open market or by getting called away on a covered call), your taxable gain or loss is calculated from this cost basis. If you sell 100 shares of AAPL at $155 and your cost basis is $147, you've got an $800 gain on the shares. Your broker's 1099-B will show the cost basis as $147 if they're tracking it correctly — and most major brokers do handle this automatically now. But double-check. I've seen brokers record the strike price as the cost basis and leave the premium out of it, which would overstate your gains.
What if you were assigned on multiple contracts?
Say you sold 3 AAPL $150 puts and got assigned on all three. You now own 300 shares. Your cost basis per share is still $147 (assuming same premium on each contract), and your total cost basis is $44,100. Nothing changes in the math — it just scales up.
Where it gets slightly more complicated is if you sold those three contracts at different times and collected different premiums. One might have been $3.00, one $2.50, one $3.50. In that case, you'd calculate the cost basis for each 100-share lot separately: $147, $147.50, and $146.50. Your broker will likely track these as separate lots, and you'll want to do the same in your own spreadsheet.
The covered call connection
Once you're assigned and running covered calls, your cost basis becomes your target for evaluating the whole trade. If you sold that $150 AAPL put for $3.00 and now own shares at $147, and you sell a $152 covered call for $2.00, your new effective cost basis drops to $145. If you get called away at $152, your total profit is $152 − $145 = $7.00 per share, or $700 on the lot. Tracking this running total is what separates traders who actually know their returns from those who are just guessing.
Keep a simple spreadsheet. Ticker, strike, premium collected, assignment date, shares acquired, cost basis per share. Add a column for covered calls sold after assignment. It takes five minutes to update and will save you real confusion at tax time.
Your practical takeaway: the next time you get assigned, write down the cost basis immediately — don't wait. Strike minus premium, that's your number. Everything else in the wheel flows from that figure.