Your AMD shares just landed in your account at an assignment price of $155. The stock is trading at $149. Your broker shows a $600 unrealized loss. You're tempted to panic-sell before it drops further.
Stop. Before you do anything, calculate your actual break-even price — because it's almost certainly not $155.
What Is Your True Break-Even After Assignment?
Your real break-even after a CSP assignment is not the strike price your shares were assigned at. It's the strike price minus every dollar of premium you collected from selling puts before assignment, net of fees:
Break-Even = Assignment Strike − (Total Net CSP Premiums ÷ Shares Assigned)
Full AMD Example Walkthrough
Over the four weeks leading up to assignment, you sold three CSPs on AMD:
| Week | Strike | Net Premium |
|---|---|---|
| Week 1 | $160 | $229 |
| Week 2 | $158 | $209 |
| Week 3 | $155 | $179 |
| Week 4 | $155 → Assigned | $249 |
Total net premiums: $866. Break-even: $155 − ($866 ÷ 100) = $146.34 per share.
The stock trading at $149 is not a $600 loss. It's a $264 unrealized gain relative to your real break-even. That's not just psychologically different — it completely changes what you should do next.
Does Your Break-Even Keep Dropping After Assignment?
Yes — and this is one of the most powerful aspects of the wheel strategy. Every covered call premium you collect after assignment pushes your break-even lower:
- Sell a $160 CC for $1.80 net → break-even drops to $144.54
- Sell a $158 CC for $1.50 net → break-even drops to $143.04
- Collect a $0.25/share dividend → break-even drops to $142.79
This is the mechanical elegance of the wheel. Given enough time and patience, your break-even can fall far below the stock's current price, effectively eliminating your assignment risk entirely.
Why Does This Change Your Decision-Making?
When AMD drops to $148 after assignment at $155, a trader looking at broker cost basis sees a $700 loss and might close the position or panic. A trader looking at their real ACB of $146.34 sees a position that's still technically profitable — and calmly sells another covered call to keep lowering the break-even further.
The math doesn't just matter for your P&L. It matters for your emotional discipline during drawdowns. OptionWheelTracker shows your true break-even in real time, so you never have to calculate it manually again.