Free Tool
Cash-Secured Put Calculator
Model selling a put backed by cash. Enter the strike, the premium, and the days to expiration to see the cash you must set aside, the income collected, your breakeven, your cost basis if the shares are put to you — and the return on that cash, annualized.
Cash required
$9,500
Premium collected
$200
Breakeven
$93.00
Cost basis if assigned
$93.00
Max profit
$200
Max loss (stock to $0)
−$9,300
Return on cash (30d)
2.11%
Annualized return
25.6%
You set aside $9,500 and sell 1 put at the $95 strike, collecting $200 up front — a 2.11% yield on the cash over 30 days (25.6% annualized). If the stock stays above $95, the put expires and you keep it all. If it finishes below, you buy 100 shares at an effective $93.00 each — the stock can fall 7.0% from today’s price before the position loses money. Figures are at expiration and exclude commissions, fees, taxes, and early assignment.
How to Use It
- 1. Pick the put strike — the price you’re committing to buy 100 shares at, per contract.
- 2. Enter the premium — what the put currently sells for, per share.
- 3. Set days to expiration — used to annualize the yield so different expirations compare fairly.
- 4. Read the diagram — flat maximum profit above the strike, stock-like losses below breakeven.
How the Numbers Are Calculated
A cash-secured put is a short put plus a cash reserve. At expiration the calculator computes:
- P/L = (premium − max(strike − price, 0)) × shares
- Cash required = strike × 100 × contracts
- Breakeven / basis if assigned = strike − premium
- Annualized return = (premium ÷ strike) × (365 ÷ days)
New to puts? Start with Calls and Puts and Exercise, Assignment, and Expiration. Selling puts to acquire stock and then selling calls against it is the wheel strategy — and once you own the shares, the covered call calculator models the other half.
Frequently Asked Questions
How does a cash-secured put make money?
You sell a put option and set aside enough cash to buy 100 shares per contract at the strike price. You collect the premium immediately. If the stock stays above the strike through expiration, the put expires worthless and the premium is pure profit. If the stock finishes below the strike, you buy the shares at the strike — but your effective cost is the strike minus the premium you collected.
How much cash do I need to secure a put?
Strike price × 100 × number of contracts. Selling one $95 put requires $9,500 set aside. Brokers hold this cash (or treasuries, at some firms) as collateral so the purchase is fully funded if you are assigned — that is what makes the put "cash-secured" rather than naked.
What is the breakeven on a cash-secured put?
Strike minus premium. Sell a $95 put for $2.00 and your breakeven is $93 — at expiration you only lose money if the stock is below that. The same number is your effective cost basis if you are assigned the shares.
How do I annualize the return on a cash-secured put?
Divide the premium by the strike (the return on your reserved cash), then scale by 365 over the days to expiration. A $2.00 premium on a $95 strike over 30 days is 2.11% for the month — about 25.6% annualized. Annualizing makes trades of different lengths comparable, but remember it assumes you could repeat the trade at the same premium all year, which markets do not guarantee.
What is the biggest risk?
The same as owning the stock from the strike down: if the company falls sharply — to far below your strike or even toward zero — you are still obligated to buy at the strike, cushioned only by the premium. Selling puts on stocks you would not be happy to own at the strike is the classic mistake.
Educational tool only. This calculator models a cash-secured put held to expiration and excludes commissions, fees, taxes, dividends, early assignment, and the interest your cash might otherwise earn. It is not financial advice.