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You got assigned shares. Here's what to do Monday morning

Start with your real cost basis, then run the same hold-or-sell check you'd run on any stock. Only then think about a covered call. Here's the order, worked out on a stock that keeps falling, because that's the case that needs a plan.

Options guide · 9-minute read · Updated 2026-10-26

First: don't do anything at 9:30

The assignment notice came overnight. See when your broker tells you. You own 100 shares you promised to buy. That's the plan working, if you had one.

Nothing has to happen at the open. The shares are yours; the broker isn't going to take them back. The first twenty minutes of a Monday are the worst time to make a decision you didn't make on Friday.

So: coffee, then three steps in order.

Step 1: write down your real cost basis

You bought at the strike, but you also collected a premium. Your Cost basis for planning is:

Strike − premium collected = cost per share.

If you'd sold the same put before and it expired, some people subtract those premiums too. That's fine for your own tracking. Just know your broker's cost basis won't show it that way, and taxes follow the broker's number, not yours. See cost basis after assignment.

Write the number down. It's the line a covered call should stay above.

Step 2: the hold-or-sell check

Forget the option for a moment. You own 100 shares of a company. Ask the question you'd ask about any stock:

• Would I buy this at today's price? If the answer is no, why are you holding it?
• Where would I sell if the chart kept falling? Pick the price now. It's usually the last place price turned around before this drop.
• How much is that loss in dollars? Does it fit your rules?

If you'd sell at that line, place the order. If you'd hold, move to step 3. If you can't answer, the stock was the wrong pick for a put, and that's a lesson for the next one, not a reason to freeze.

This is the step most people skip. They go straight to "sell a call" because that's what the wheel strategy says. The wheel assumes you'd be happy owning the stock. Check that it's still true.

Step 3: the first covered call, and its one rule

The rule: sell the call at or above your cost basis. A call below cost basis locks in a loss on the shares if it's exercised.

That rule has a cost. If the stock fell well below your strike, a call above cost basis is far out of the money and pays very little. That's not a bug. That's the honest price of the drop.

A worked example (an illustration, not a trade idea)

A made-up stock, XYZ, trades at $50. You sell one 30-day $45 put for $1.00 and collect $100.

At expiry XYZ closes at $42. Saturday you're assigned 100 shares at $45. Cost basis: $44.

Monday, XYZ opens at $41. You're down $400 on the shares against $100 of premium: −$300 net.

You run the check. You'd still hold it; your sell line is $38, the last place it turned around. You look at calls above $44:

• The $45 call, 30 days out, bids $0.25. You sell it. +$25.

XYZ keeps sliding. At expiry it's $38, right at your line. The call expires. Now you choose:

Look at the last row. Selling the $40 call looks best on this table. But if XYZ then bounces to $47, the holder in the second row is back above cost. The third row is stuck: shares sold at $40, loss locked, and you watch the recovery from outside. That's the strike-below-cost trap.

When the stock is above your cost

The happier case, briefly. XYZ dipped to $44.50 at expiry, you were assigned at $45, and Monday it's $46. Your cost is $44. The $47 or $48 call pays a normal premium, you're above cost, and the wheel turns the way the brochure says. Our page on being called away picks it up from there.

Notice how little there is to decide in that case. All the decisions live in the losing one.

Three things not to do on the first morning

1. Don't sell the shares at the open because you panicked. If you'd sell, sell at your line, or at least after the first half hour.
2. Don't sell a call below your cost basis for a "real" premium. See the table.
3. Don't sell a second put to "average down." That's doubling a position you already have more of than you planned. Covered in assignment mistakes.

What to do with this

1. Before you sell any put, write the three answers: cost basis if assigned, the sell line, the loss in dollars at that line.
2. Monday morning after an assignment, read those three lines before you open the chain.
3. Log the shares in your journal as a stock trade, with the put premium noted. The covered calls go on the same row. See wheel strategy cost basis.

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