Adjusted Cost Basis (ACB) is the true break-even price of your shares when running the wheel strategy. It is calculated by taking the price you paid for the shares (your assignment price) and subtracting every dollar of option premium you have collected throughout the entire campaign — including premiums from cash-secured puts sold before assignment and all covered call premiums collected afterward.
For example: you sell a $150 CSP for $3.00, get assigned at $150, sell three covered calls for $1.00 each, and receive a $0.50 dividend. Your ACB is $150 − $3.00 − $3.00 − $0.50 = $143.50. You do not lock in a loss on a covered call unless you sell it below $143.50.
Your broker will never show you this number correctly — it will simply report $150 as your cost basis. Tracking ACB yourself is non-negotiable for disciplined wheel trading.