Open your Robinhood app right now. Find any stock you own through the wheel strategy. Look at "Average Cost." Chances are that number is significantly higher than your actual cost of owning those shares — and the difference is money you've already made that your broker doesn't know about.
Why Does Robinhood Show the Wrong Cost Basis?
Robinhood, Webull, and essentially every retail broker calculate cost basis using one simple rule:
Cost Basis = What You Paid For the Shares
That's it. If you were assigned on a $155 put, your cost basis is $155. The broker has no mechanism to know about — or account for — the CSP premiums you collected before assignment. From its perspective, those were three separate, already-closed options trades that happened to be on the same ticker. The connection between those premiums and your current stock position doesn't exist in the broker's data model.
What Data Is Your Broker Missing?
Here's what a typical broker sees vs what actually happened in a wheel campaign:
- Broker sees: Stock purchase at $155 on March 14. Cost basis = $155.00
- What actually happened: Three CSPs collected $850 in premiums before assignment. Real ACB = $146.50
That $8.50/share gap represents $850 in premium income your broker isn't crediting to your position. On a 100-share lot, that's the difference between seeing an $850 unrealized gain and seeing it reported as roughly break-even.
How Does This Lead to Bad Trading Decisions?
This matters more than just seeing an accurate number. When AMD drops from $155 to $149 after your assignment, your Robinhood app shows a $600 unrealized loss. A trader trusting that number might panic-sell to cut the loss. A trader who knows their real ACB is $146.50 sees a position that's still $250 in the black — and calmly sells another covered call instead of exiting at a loss that doesn't actually exist.
Does This Affect Tax Reporting?
Yes, but not in the way you might expect. Your broker's 1099-B will show your stock sale using the assignment price as cost basis — meaning it will show a larger gain or smaller loss than your actual economic result. Your option premiums are reported separately as closed option transactions on their own 1099-B entries. You're not being double-taxed, but you do need to be careful to reconcile both reports when calculating your real gain or loss on a wheel campaign at tax time.
The solution is to maintain your own accurate cost basis independently. OptionWheelTracker was built precisely because broker cost basis is structurally wrong for wheel traders — not because of any fault in the brokers, but because the wheel strategy requires campaign-level accounting that no broker's transaction ledger provides.