Try these example inputs in the Cash-secured put calculator.
These figures match this guide's worked example. They are illustrative. They stay on this device and never appear in the URL.
A cash-secured put is a put you sell while setting aside enough cash to buy the shares if you are assigned. You collect a premium up front. If the put finishes in the money, you buy the shares at the strike.
Key takeaways
Cash secured = strike × contracts × multiplier
Net premium = premium per share × shares − commission
Effective purchase price = strike − net premium per share
Static return divides net premium by the cash secured. Annualized return multiplies that by 365 ÷ days to expiration. That scaling assumes the same premium could be repeated. It is not a forecast.
Sell 1 standard contract (100 shares) at a $150 strike. Premium is $3.50 a share, 30 days remain, and commission is $0.
Gross collateral is the $15,000 the strike would require. Net capital after the premium credits is $14,650. You still buy at $150 if assigned; the $350 is not a discount sitting in the strike.
| Outcome | Result |
|---|---|
| Put expires worthless | Keep $350. That is the maximum profit in this model. |
| Assigned, then shares to $0 | You paid $150 a share and keep $350. Loss on the shares is $14,650 before other costs. |
Maximum profit is the premium. Maximum loss is the strike times shares minus that premium, if the shares go to zero after assignment. Neither figure is a probability of profit. Assignment means you buy the shares; it is an obligation, not a limit order.
Use the cash-secured put calculator for the same inputs. If you are not assigned, you keep the premium and the cash. If you are assigned, you own the shares at the strike, and the premium reduces the net cost as above.
It is the cash the strike would require, before the premium arrives. The effective price is a way to read that premium against the strike. It is not a limit order sitting below the market.
Early assignment, taxes, and a move in the option before expiration are absent. The obligation is real: assignment means you buy at the strike, even if the shares are far below it. The premium reduces the net cost. It does not cancel the purchase. After assignment, a later call sale is a separate trade, covered in what a covered call is.
A company page shows a share price you might compare with the strike. The page does not quote the put. Type the strike and premium in the cash-secured put calculator. The Options Industry Council describes the same structure in its cash-secured put overview (opens in a new tab).
For general education only. Nothing here is investment advice.
Formulas and worked examples are MarketCapLens's. See who checks the numbers.