Free tool
Wheel strategy cost basis calculator
Once a put gets assigned, your broker shows the strike as your cost. That ignores the premium you've already banked. Add every put, covered call and roll on the stock, and this shows what the shares really cost you and the lowest call strike that won't lock in a loss.
Example numbers are filled in. Change any box and the results update. Educational only, not financial advice.
How the numbers work
- Real cost per share: assigned price minus all premium kept per share, plus fees per share. Every put, covered call and roll credit on the same stock lowers it. Buybacks, debit rolls and fees raise it.
- Lowest call strike: your real cost, rounded up to the next $0.50. A call at or above it means getting called away is a win, not a locked-in loss.
- Up or down today: the stock price minus your real cost, times shares. It counts the premium you've already banked.
- Profit if called away: (call strike minus real cost) times shares.
Example
Sell a $50 put for $1.20. It gets assigned, so you buy 100 shares at $50.
Sell a covered call for $0.80. It expires. Sell another for $0.75.
Premium kept: $1.20 + $0.80 + $0.75 = $2.75 a share ($275). Real cost: $50 − $2.75 = $47.25.
The stock is at $48. Your broker shows you down $200. Counting premium, you're up $75.
Related tools and lessons
- Covered call calculator: premium, return and profit if called away
- Options roll calculator: net credit or debit and your new break-even
- Free wheel tracker spreadsheet: tracks cost basis across every cycle
- How to sell a covered call: step 2 of the wheel
Questions beginners ask
What is cost basis in the wheel strategy?
It is what your shares really cost you after counting the premium you collected. If a $50 put gets assigned and you collected $2.75 a share in put and call premium, your wheel cost basis is $47.25 a share, even though your broker still shows $50.
Why does my broker show a different cost basis?
Brokers usually show the assignment price, sometimes lowered by the put premium only. Covered call premium is not subtracted. This calculator tracks every premium in the cycle so you know your real break-even.
Should I sell a covered call below my cost basis?
My rule is no. I only sell calls at or above my cost basis, so getting called away never locks in a loss. The calculator shows that floor as the lowest call strike.
Do buyback costs and fees count?
Yes. Enter a buyback or a debit roll as a negative amount, and add your commissions and fees. Both raise your cost basis.
Is this my tax cost basis?
No. This is a tracking number for running the wheel. Tax rules treat put and call premium differently, so use your broker's 1099 and a tax professional for taxes.