Cash-secured put calculator
This estimates the cash a short put sets aside, the premium return on that cash, and the effective purchase price if you are assigned. Selling a put obligates you to buy the shares at the strike if assigned. The cash-secured put guide uses the same example.
Cash secured = strike × contracts × multiplier. Effective purchase price = strike − net premium per share. Maximum profit = net premium. Maximum loss = cash secured minus net premium, if the stock goes to zero. Break-even = the effective purchase price
Maximum profit
Enter contracts, strike, premium, and days.
How to estimate a cash-secured put
- Enter the contracts and the strike. Contracts are a whole number. One equity contract is usually 100 shares. Cash secured is the strike times contracts times the multiplier. Open adjusted contract size only when the deliverable is not 100 shares.
- Enter the premium, days, and commission. Premium is per share. Commission is a dollar amount for selling the put.
- Read maximum profit, maximum loss, and the effective price. Maximum profit is the net premium if the put expires. Maximum loss is cash secured minus that premium if the stock goes to zero. Static return divides net premium by the cash secured. Annualized return scales that by 365 divided by the days left. It assumes the same premium could be repeated. It is not a forecast.
Frequently asked questions
- What does a cash-secured put set aside?
- Cash secured equals the strike times the shares. A $150 strike on 100 shares sets aside $15,000. That is the cash to buy the shares if you are assigned. The premium arrives up front and is not subtracted from the cash figure.
- What is the effective purchase price if assigned?
- Subtract net premium per share from the strike. A $3.50 premium and no commission on a $150 strike is an effective price of $146.50. You still buy at the strike. The premium is what lowers the net cost in this scenario.
- Is this investment advice?
- No. The calculator is for general informational and educational purposes only. Selling a put obligates you to buy the shares at the strike if assigned. This page does not recommend that trade.
Related tools
- Covered call calculatorThe other overlay: a call against shares you already hold.
- Break-even calculatorStock purchase break-even after you are assigned.
- Position size calculatorCheck whether cash covers the assignment lot.
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