Cash-Secured Put
Cash-Secured Put Calculator for Beginners
See the real cash required, premium income, breakeven, and effective stock entry price before placing the trade. Free, no signup. Then drag the expiration slider to see the profit or loss if the stock finishes higher or lower.
At expiration
Pick where the stock might finish.
| Stock at expiry | Move | Put P/L | Expiration scenario |
|---|---|---|---|
| $40.00 | −20% | −$350.00 | below strike |
| $45.00strike | −10% | +$150.00 | at strike |
| $50.00 | 0% | +$150.00 | above strike |
| $55.00 | +10% | +$150.00 | above strike |
| $60.00 | +20% | +$150.00 | above strike |
This table uses the intrinsic payoff at expiration. Actual exercise and assignment can differ (early assignment, expiration instructions), and it doesn't model the probability of assignment. How options assignment works
Example: you collected $150.00 in premium, but if the stock ends at $40.00 this put would be down $350.00 at expiration.
Expiration payoff only. It isn't what the position is worth if you close early, and it isn't a forecast. Excludes dividends and taxes.
Estimates exclude taxes, dividends, brokerage costs you don't enter, and changes in option value before expiration. Educational use only.
In plain English
You collect a premium today and reserve enough cash to buy 100 shares at the strike price. If the put is assigned, you buy the shares. If it expires unassigned, you keep the premium and the cash is released.
Simple cash-secured put example
Put strike: $45
Premium: $1.20 per share
Contracts: 1
Cash reserved: $4,500
Premium collected: $120
Effective entry: $43.80 per share
Formulas used
- Cash required = strike × 100 × contracts.
- Premium income = premium per share × 100 × contracts.
- Effective buy price before fees = strike − premium per share.
- Effective economic entry including fees = (strike × shares − premium × shares + fees) ÷ shares. This is an economic entry, not your tax cost basis.
- Profit or loss at expiration = (premium − amount the stock finishes below the strike) × 100 × contracts − fees. It uses the intrinsic payoff; actual assignment can differ.
- Annualized return is a simple annualization, not a forecast of future results.
Beginner Questions
How much cash do I need for a cash-secured put?+
You normally reserve the strike price multiplied by 100 shares for each contract. A $50 strike therefore requires $5,000 per contract before subtracting any premium received.
What happens if the put is assigned?+
You buy 100 shares per contract at the strike price. Your effective entry price is the strike minus the premium collected, but the stock may still fall below that level.
Do I keep the premium if I am assigned?+
Yes. The premium is yours to keep. It lowers your effective entry price, but it does not protect you from a large decline in the stock.
When might a beginner use a cash-secured put?+
It is commonly considered when you are willing to buy 100 shares at a chosen price and have enough cash available. It should not be used on a stock you would be uncomfortable owning.
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