Suppose you originally bought 200 shares at $50 for $10,000. You were assigned and sold all shares at $40 = $8,000. That’s a loss of $2,000. Now, you want to buy back, but current price is $70 Based on proceeds from assignment we only get $8000. The current stock price is $70. So we can buy only 8000/70 = 114.28 shares. Since option contract always require 100 shares and we don't want to exceed $8000, we will buy 100 shares at $70 for $7000 and $1000 will be unused cash. This cash can be reinvested but must be included in order to calculate breakeven price. You’ve spent $10,000 originally, recovered $8,000, and reinvested $7,000 and unused cash $1000. To break even on (new qty of shares) 100 shares, your new break-even price is: $7000 (New Purchase Price) + Loss $2000 + Unused Cash $1000 = $10,000 $10,000 / 100 = $100 per share.