⚙️ Wheel Strategy Update: Managing Assignments & Setting Up the Next Rotation

Turning Assignments into Income

Hello traders and investors,

Friday’s expirations brought a few assignments my way. For anyone new here, assignment is not a negative event in the Wheel Strategy. It’s the natural progression of the system. When a cash-secured put (CSP) expires in the money, you take ownership of the stock, reduce your effective cost basis by the premium collected, and move on to phase two: selling covered calls (CCs) to generate recurring income.

I’ve said this many times before: some of my best returns have come from stocks I was assigned on. Once I move to selling covered calls, the premium collected — combined with potential upside if the shares are called away — often outpaces the initial CSP income.

Here’s how things stand after Friday’s close 👇

---

💡 Assigned Stocks Breakdown

⚡ MARA (Marathon Digital Holdings)

• Trade: Sold Nov 7th $19.00 CSP

• Premium Collected: $133.50

• Cost Basis: $19.00 – $1.34 = $17.66

• Current Price: $15.88

• Unrealized P/L: -$312 (-16.4%)

Plan: I’ll be watching Monday’s open closely. If it’s a green day and volatility holds, I’ll sell covered calls for optimal premium at a strike that still locks in a solid profit if called away. MARA’s volatility makes it ideal for income generation — that’s where the real power of the Wheel kicks in.

---

🎧 SOUN (SoundHound AI)

• Trade: Sold Nov 7th $16.00 CSP

• Premium Collected: $138.50

• Cost Basis: $16.00 – $1.39 = $14.61

• Current Price: $14.38

• Unrealized P/L: -$162 (-10.1%)

Plan: Similar setup here — I’ll wait for a positive session before writing CCs. SOUN’s implied volatility typically stays elevated, so I can expect strong premiums. My goal is to sell calls far enough out to allow for both time decay and potential upside participation.

---

⚙️ RGTI (Rigetti Computing)

• Trade: Sold Nov 7th $38.00 CSP

• Premium Collected: $111.00

• Cost Basis: $38.00 – $1.11 = $36.89

• Current Price: $34.67

• Unrealized P/L: -$333 (-8.8%)

Plan: RGTI reports earnings after the bell tomorrow. If pre-earnings pricing gives me a quick profit opportunity, I’ll take it. If not, I’ll hold through earnings and reposition based on the market’s reaction. I like the stock’s structure and the way it’s been trending into the report.

---

🤖 BBAI (BigBear.ai)

• Trade: Sold Nov 7th $6.50 CSP (8 contracts)

• Premium Collected: $20 × 8 = $160

• Cost Basis: $6.50 – $0.20 = $6.30

• Current Price: $5.78

• Unrealized P/L: -$576 (-11.1%)

Plan: BBAI also reports at market close tomorrow. If the stock shows strength before the announcement, I may sell for a quick profit. If not, I’ll hold and manage it post-earnings. Either way, the premium collected and cost basis keep my downside cushion intact.

---

🧠 Summary

So to recap, assignment isn’t the end of the trade — it’s the transition to income mode. I’ve consistently earned more overall from stocks I was assigned to and sold covered calls on than from those that expired worthless.

For MARA and SOUN, if Monday opens strong, I’ll begin selling CCs and start collecting weekly premium again — and if those calls get exercised, I’ll walk away with both premium and capital gains.

For RGTI and BBAI, I’ll let the earnings catalyst decide. If I can exit profitably, I will. If not, I’ll hold through and reposition accordingly.

I’ll be posting these upcoming CC trades for paid subscribers once I execute them, so you’ll get the full details when I do. Stay disciplined! -EC

---

*Disclaimer: The examples in The Options Oracle are my opinion, not financial advice.