What is a cash-secured put?

A cash-secured put is a short put option backed by cash equal to 100 shares × strike price. You collect premium up front; if the stock stays above the strike at expiration you keep the premium. If it drops below, you are obligated to buy the shares at the strike.

How is annualized return on capital calculated for a CSP?

Annualized ROC = (Premium ÷ Cash secured) × (365 ÷ days to expiration). Cash secured equals strike × 100 × number of contracts.

What is the effective cost basis if a cash-secured put is assigned?

Effective cost basis = strike − premium received. This is the true price you pay per share if assigned, and is usually below the strike and often below current spot.

What delta should I sell cash-secured puts at?

Income sellers typically target −0.15 to −0.30 delta, giving roughly a 70–85% chance the put expires worthless. Lower (more negative) deltas yield more premium but increase assignment risk.

Is selling cash-secured puts safer than buying the stock?

CSPs have slightly less downside than outright stock ownership because the premium received cushions losses. Maximum loss is still substantial — equal to (strike − premium) × 100 if the stock goes to zero.

Cash-secured put calculator — premium yield and return on capital

Compute premium yield, annualized return on cash at risk, and what your cost basis would be if you're assigned. Built for theta-gang and wheel-strategy traders.

Trade Inputs

Ticker

Current price

Expiration

Load chain to populate

Strike

Pick an expiration first

Premium / share

Auto-fills from chain; override to model your own price

Contracts

Implied volatility

For assignment-risk model

Days to ex-dividend (if any)

Results

Cash at risk

—

Strike × shares

Premium income

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Premium yield

—

— annualized ROC

Effective cost basis

—

— vs current

Breakeven

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If assigned

Days to expiry

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Cash-secured put calculator — premium yield and return on capital

Trade Inputs

Results

Payoff Diagram

How a cash-secured put works