Wheel strategy calculator: your running cost basis
The wheel lives or dies on one number: what the shares really cost you after every premium. Track it here, step by step, and see what being called away would mean — including when it means a loss.
| Step | Cash in or out |
|---|
How it works: the wheel is a loop — sell a put, get assigned the shares, sell calls on them, get called away, repeat. Every premium you collect lowers what the shares really cost you. Running cost basis = the strike you were assigned at − all put premiums − all call premiums, per share. Net result if called away = (call-away strike − cost basis) × 100 × contracts. The ledger below shows every step as cash in or out. Fees and dividends left out. An illustration of the math on your inputs, not a trade idea.
The example is a loss on purpose
The default inputs show the wheel's most common trap. The stock was assigned at $50, then kept falling. To collect any real premium, the calls had to be sold at a $45 strike — below cost. The premiums add up to $3.50 a share, but the shares lost $5. If the stock rises and the shares are called away, the loss is locked in: −$150 per contract. Selling calls below your cost basis is where the wheel strategy goes wrong most often, and the fix is boring: only wheel a stock you'd hold through a drop, at a size where a drop is survivable.
Use this as your running ledger
Each time a put expires or a call expires, add its premium to the matching box and watch the cost basis fall. Each time you're assigned, the strike in the top-right box is your starting point. The number that matters is the basis, not any single premium — a wheel that collected ten small premiums and then gave back more than that on one assignment is behind, however good each premium looked. How assignment works mechanically is in options assignment, explained.
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