basicLow RiskNeutral / Bullish
Cash Secured Put
Sell a put backed by cash and get paid to wait to buy a stock at a lower price.
What is a Cash Secured Put?
You sell a put option and keep enough cash in your account to buy 100 shares if assigned. The put buyer pays you a premium. If the stock stays above the strike, you keep the premium. If it falls below, you buy the shares at the strike — but your effective cost is the strike minus the premium collected.
When to use it
Use when you want to buy a stock but at a lower price, or when you simply want to collect premium on a stock you're bullish on long-term. Works well in neutral-to-bullish markets.
Structure
Sell 1 put at your target buy price, keep cash equal to strike × 100 in reserve.
Key Metrics
Max Profit
Premium received. Earned in full if stock stays above strike at expiration.
Max Loss
Stock goes to zero: (strike × 100) − premium received.
Breakeven
Strike price − premium received.
Greeks Profile
Delta: positive (acts like owning stock partially). Theta: positive. Vega: negative.
Tips & Best Practices
- 1Only sell puts on stocks you genuinely want to own.
- 2OTM puts at support levels give good probability and meaningful premium.
- 3The covered call is the natural follow-up if you get assigned.
- 4This is Warren Buffett's preferred options strategy.
See it in action
Model a Cash Secured Put with a real ticker. See the P&L chart, heatmap, and exact breakevens.
Open Cash Secured Put Calculator →