Cash-Secured Put Calculator
Use this free cash-secured put calculator to model your income trade before you place it. Enter your strike price and premium received to instantly see max profit, breakeven, return on capital, and a full P&L diagram.
How to use the cash-secured put calculator
Enter your strike price, premium received, and number of contracts above and the calculator updates in real time. Here is what each input does.
Pull current market data (optional)
Type a ticker like AAPL and click Get Price. The calculator fills in the current stock price, dividend yield, and the risk-free rate from the 13-week T-bill, then loads the option chain so you can pick actual strikes and premiums.
Set up your cash-secured put
The cash-secured put leg is preloaded for you. Pick the strike, expiration, and premium straight from the option chain, or type your own numbers. The calculator works out implied volatility from the premium you enter, and you can still edit it.
Calculate and read the results
Click Calculate P&L to see max profit, max loss, breakeven, return on risk, and probability of profit, plus position Greeks: delta, gamma, theta, vega, and rho.
Stress test before you trade
Drag the view-date slider to see your P&L curve on any day before expiration, shift implied volatility up or down 50 points, and scan the price-by-date P&L table to see how the trade behaves across scenarios.
This cash-secured put calculator prices each leg with your choice of an American-style binomial model (the default for US equity options) or European Black-Scholes-Merton, and accounts for dividend yield. You can set a per-contract commission, copy a shareable link to your exact setup, download the chart as a PNG, and switch to dark mode.
Understanding the cash-secured put strategy
A cash-secured put is one of the most practical income strategies for investors who are willing to buy a stock at a specific price. You sell a put option below the current stock price and set aside enough cash to purchase the shares if the option is assigned. If the stock stays above your strike through expiration, the put expires worthless and you keep the premium as pure income. If the stock falls below your strike, you buy 100 shares at an effective cost basis equal to the strike minus the premium received.
The strategy is a favorite among long-term investors because it lets you get paid to wait for a stock to come down to your target price. Instead of placing a limit buy order at $48.50 and hoping the stock dips there, you sell the $50 put, collect $1.50, and effectively agree to buy the stock at $48.50 if it falls. Either you keep the premium or you own a stock you wanted anyway at a price you were comfortable paying.
Return on capital
Because selling a cash-secured put requires you to hold cash equal to the strike price times 100 shares, the return on capital metric is important for evaluating whether the premium is worth tying up that capital. For example, selling a $50 put and collecting $1.50 ties up $5,000 in cash per contract and generates $150 in income, a 3% return for the duration of the trade. Annualizing this figure helps compare it to other uses of that same capital.
When to use a cash-secured put
Cash-secured puts work well when you are neutral to bullish on a stock, would genuinely be comfortable owning it at the strike price, and want to generate income while you wait. They are most effective when implied volatility is elevated, since you collect more premium. They are commonly used as the entry leg of the wheel strategy, where you sell puts until assigned, then sell covered calls on the shares you own until they are called away, and repeat the cycle.
Cash-secured put example with real numbers
Here is a worked example you can enter directly into the calculator above to see the full P&L diagram in action.
Trade setup: XYZ stock trading at $55.00
Common cash-secured put mistakes to avoid
Most losing cash-secured puts do not fail on the options math. They fail on a few avoidable setup choices. Run your trade through the calculator above, then check it against the mistakes below before you sell the put.
Selling puts on a stock you do not actually want to own
A cash-secured put is a promise to buy 100 shares at the strike if the stock falls below it. The premium is your reward for taking that obligation. If you would not be happy holding the stock at the strike price, the trade is a bad one no matter how attractive the premium looks. Only sell puts on companies you would be comfortable owning through a drawdown.
Chasing premium with a strike that is too close to the price
A strike right at or just below the current price pays the most, but it also gets assigned the most often and leaves you little downside cushion. Pick the strike where you would genuinely want to buy, then check the effective cost basis (strike minus premium) in the calculator. That number, not the raw premium, is the price you are really agreeing to pay.
Not setting aside the full cash to cover assignment
The whole point of the strategy is that the cash to buy the shares is reserved and waiting. Selling the put on margin instead turns a conservative income trade into a leveraged one, and a sharp drop can force you to buy shares you cannot fully pay for. Keep the collateral (strike times 100) parked before you open the position.
Ignoring earnings and ex-dividend dates
Holding a short put through an earnings report exposes you to a gap that can blow past your strike overnight. Assignment risk also rises around ex-dividend dates. Check the calendar before you sell, and size the trade so an unexpected move is survivable rather than account-defining.
Overlooking the opportunity cost of the tied-up cash
Collateral locked behind a low-premium put earns you very little while it sits there. Compare the annualized return on the premium against what the same cash could earn elsewhere. A put that ties up thousands of dollars for a handful of dollars in premium is rarely worth the assignment risk.
Having no plan for what happens after assignment
Assignment is not a failure; it is one of the two ways the trade can end. Decide in advance whether you would hold the shares, sell them, or keep collecting income. Many traders who get assigned then sell a covered call against the shares, turning the position into the wheel strategy. Model that follow-up trade before you need it, not after.
Explore other options strategy calculators
Each strategy has its own dedicated calculator with a full P&L breakdown, worked example, and FAQ.
Free trading journal
Track whether your cash-secured puts are consistently profitable
You just modeled the setup. Use the free journal to log every cash-secured put and track your win rate and average P&L by strategy. Enter your email to get the template (Excel and Google Sheets).
- Free trading journal template (Excel and Google Sheets)
- Track win rate, average P&L, and trade history by strategy
- Works with any broker. No app required.
No spam. Unsubscribe any time.
Cash-secured put calculator FAQ
Common questions about the cash-secured put strategy and how to use this calculator.
A cash-secured put is a strategy where you sell a put option and hold enough cash in your account to buy 100 shares at the strike price if you are assigned. You collect a premium upfront. If the stock stays above the strike at expiration, the put expires worthless and you keep the full premium. If the stock falls below the strike, you are obligated to buy the shares at the strike price, but the premium collected reduces your effective cost basis.
The maximum profit is the premium received multiplied by 100 shares per contract. Using the example above, that is $150. You achieve max profit when the stock closes at or above the put strike at expiration, causing the option to expire worthless. You keep the premium and your cash is freed up to run the trade again in the next expiration cycle.
When you are assigned, your broker uses the cash you set aside to purchase 100 shares of stock at the strike price per contract. Your effective cost basis is the strike price minus the premium you already collected. For example, a $50 strike with $1.50 in premium means you own the stock at an effective cost of $48.50 per share. From there, most traders will sell a covered call against the shares to continue generating income while waiting for the stock to recover or rise to the covered call strike.
Return on capital equals the premium received divided by the cash required to secure the position. Cash required is the strike price times 100. For example, selling a $50 put and collecting $1.50 requires $5,000 in cash per contract and returns $150, which is a 3.0% return on capital for the duration of the trade. To annualize this, divide 3.0% by the number of days until expiration and multiply by 365.
The wheel strategy is a systematic income approach that cycles between two positions. First, you sell cash-secured puts on a stock you are willing to own. If the put expires worthless, you collect the premium and repeat. If you are assigned, you now own the shares. At that point, you sell a covered call against those shares to generate more income while waiting for the stock to be called away at the call strike. Once the shares are called away, you start the cycle again by selling cash-secured puts. Each leg of the wheel generates premium income, and the combined effect lowers your average cost basis over time.
This calculator is for educational and informational purposes only. Options trading involves substantial risk and is not suitable for all investors. Past performance is not indicative of future results. Always consult a licensed financial professional before making investment decisions.