A cash-secured put is an options strategy where you sell a put option and hold enough cash to purchase 100 shares at the strike price if assigned. You collect a premium upfront. If the stock stays above the strike, you keep the premium. If it falls below, you may buy shares at a pre-agreed price — with your effective cost basis reduced by the premium collected. Use the calculator, simulator, and framework below to study the strategy. This is educational content only — not investment advice.
Calculator Estimate
Cash-Secured Put Calculator
Enter put strike, premium per share, DTE, and number of contracts to estimate your cash requirement, premium income, breakeven, and yield. Calculator estimate only.
Cash-Secured Put Calculator
Enter put strike, premium, DTE, and contracts to estimate cash required, premium collected, breakeven, and yield. Calculator estimate only.
$14,500
Cash Required
$180.00
Premium Collected
$143.20
Breakeven Price
1.24%
Premium Yield
15.1%
Annualized Estimate
⚠️ Calculator estimate only. Cash required is strike × 100 × contracts. Breakeven = strike − premium. Annualized yield is a mathematical estimate — not a projected return. Options involve substantial risk.
Scenario Simulator
Assignment Scenario Simulator
Study the four main expiration outcomes for a cash-secured put. Select a scenario to see educational framework notes for each possible result.
Assignment Scenario Simulator
Select a scenario to study what educational frameworks say about each cash-secured put expiration outcome.
Stock stays above strike
What may happen
The put option expires worthless. You keep the entire premium collected and your cash is returned. You can sell another cash-secured put in the next expiration cycle.
Assignment risk note
No assignment occurs. The main risk in this scenario is opportunity cost — your cash was tied up as collateral and could not be used elsewhere.
Breakeven impact
Premium provides a buffer against future price declines. Your cash is now free to deploy in another put-selling cycle.
Educational note: Most common outcome for out-of-the-money puts when the stock holds above the strike price at expiration.
Educational illustration only. Not investment advice. Actual outcomes vary based on market conditions.
Strategy Comparison
Cash-Secured Put vs. Limit Buy Order
A common educational analogy compares cash-secured puts to limit buy orders. Understanding the key differences is essential.
Similarities
→Both express willingness to buy a stock at a lower price
→Both represent a predetermined buy price below current market
→Both require having capital available to purchase shares
→Put sellers have a fixed obligation at expiration — limit orders can be cancelled
→Assignment on a put is certain if stock is below strike; limit orders may not fill
→A stock can fall far below the put strike after assignment — creating larger losses than the premium
Cash Requirements
Understanding How Much Cash You Need
Cash-secured puts require full cash collateral. This visual shows how contract count scales your cash requirement.
Cash Requirement Examples
Sample educational illustration using a hypothetical $145 strike put at $1.80 premium. Not actual market data.
1 Contract
$14,500
Cash required (145 × 100 × 1)
Premium collected$180.00
Breakeven/share$143.20
2 Contracts
$29,000
Cash required (145 × 100 × 2)
Premium collected$360.00
Breakeven/share$143.20
5 Contracts
$72,500
Cash required (145 × 100 × 5)
Premium collected$900.00
Breakeven/share$143.20
⚠️ Premium reduces your effective purchase price (breakeven) but does not remove assignment risk. The stock can fall far below the strike after assignment. Sample educational data only.
Readiness Checklist
Cash-Secured Put Readiness Checklist
Work through this checklist before studying or placing a cash-secured put. Each item represents a key concept in the CSP education framework.
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Risk Education
Common Cash-Secured Put Mistakes
These five educational errors appear most frequently in options income education for put sellers.
⚠️
Selling puts only for high premium
Very high premium on a put usually means elevated risk — earnings proximity, weak fundamentals, or high implied volatility. Chasing yield without understanding why the premium is high is a common educational error.
⚠️
Ignoring assignment obligation
Cash-secured puts carry a real obligation to buy stock. Some beginners treat them as pure premium collection without preparing for assignment. If you are not ready to own the shares, the strategy carries unexamined risk.
⚠️
Selling puts on stocks you don't want to own
If the stock falls below your strike, you will be assigned shares. Selling puts on companies you would not want to own creates a mismatch between the strategy and your actual goals.
⚠️
Not reserving enough cash
The full collateral (strike × 100 per contract) must be set aside. If your cash is partially allocated elsewhere, you may face a margin call or forced liquidation at assignment.
⚠️
Selling puts through earnings without awareness
An earnings announcement can cause a large gap move that renders your premium trivial relative to the stock loss. Most income education frameworks strongly caution against holding open put positions through earnings.
Educational content only. All calculators, simulations, and examples on this page are for educational purposes only. This is not investment advice, a trade recommendation, or a solicitation to buy or sell any security. Options involve substantial risk of loss and may not be suitable for all investors. Past performance does not guarantee future results. Consult a qualified financial professional before making any investment decisions. Operated by Wealth Building Academy LLC.