EXAMPLE
Cash-secured put
Illustrative example
- Underlying
- $200.00
- Premium income
- $310
- Breakeven
- $186.90
- Max profit
- $310
- Max loss
- -$18,690
- Expires
- 2026-10-16
Premium strategy tool
Cash-Secured Put Screener & Signals
A cash-secured put sells a put option and sets aside enough cash to buy 100 shares at the strike. You collect premium and agree to buy the stock at the strike if the put is assigned.
The research question is not only how much premium is offered. It is whether you would be comfortable owning the shares at the breakeven, and how much capital is tied up while you wait.
Product preview
The chart below is the same payoff component used inside the platform, run on the hypothetical example described later on this page.
Cash-secured put
Cash set aside behind a short put: premium is collected and shares are bought at the strike if assigned.
Illustrative example
- Sell$190 put
Profit zoneLoss zoneStock priceBreakeven
- Example stock
- $200.00
- Premium income
- $310
- Breakeven
- $186.90
- Max profit
- $310
- Max loss
- -$18,690
- Evaluated at
- Expiration
Cash secured: reserve the full strike × 100 per contract. Assignment and stock ownership are possible.
Payoff scenario
Illustrative example, read-only. Hypothetical inputs run through TradingSignalAI's payoff model.
Illustrative example
- Hypothetical underlying
- $200.00
- Premium income
- $310 ($3.10/share)
- Position · standard 100-share contracts
- Sell one $190 put · $19,000 collateral
Cash-secured put payoff
1 contract · 100 shares if assigned · expires 2026-10-16
Hover, touch, or focus the chart and use arrow keys to read P/L at a price.
- Shaded above $0: profit
- Shaded below $0: loss
- Solid line: P/L at expiration
- Dashed line: reference price
- Circle: break-even
- Dotted line: strike (values below)
- Break-even
- $186.90
- Strikes
- $190.00
- Payoff profit cap
- $310
- Max loss
- $18,690
The chart shows underlying prices from $162.90 to $224.00 only. Losses or gains outside this window can be larger; the window's lowest and highest points are not maximum risk.
Cash secured: reserve the full strike × 100 per contract. Assignment and stock ownership are possible.
Uses the signal sell bid; before commissions, financing, exercise/assignment costs and taxes.
Move the pointer or focus the chart and use the left and right arrow keys to read profit or loss at each stock price. These are not live quotes or signals.
Cash-secured put, built step by step
Hypothetical example. Not a quote or a result.
Illustrative example
Reserve cash
$190 strike x 100 = $19,000 held as collateral.
Sell one $190 put
Strike is 5% below the $200.00 stock. At or below $190 at expiration, assignment is likely and you buy 100 shares at $190.
Collect the premium
$3.10 bid x 100 = $310, received up front, before fees.
Max gain
$310
The premium, if the put expires unused.
Breakeven
$186.90
Strike minus premium.
Assignment level
$190.00
Put is in the money below the strike.
Max loss
-$18,690
If the stock went to zero. Collateral stays tied up.
Below the short strike
Stock $180.50
-$640 P/L
Assigned at $190. The stock is worth less than your purchase price, offset by the premium.
At the short strike
Stock $190.00
$310 P/L
Put has no value at expiration, so you keep the premium.
Above the short strike
Stock $199.50
$310 P/L
Put expires unused. You keep the premium and your cash is released.
Metrics in pictures
Premium relative to capital
Cash-secured put example, hypothetical inputs.
Illustrative example
Premium
$310
Capital
$19,000
$190 strike x 100 collateral
Return
1.63%
13 days
Bar width = premium as a share of capital. $310 / $19,000 = 1.63%, or 0.126% per day over 13 days
Premium income only, before fees, taxes and any stock gain or loss. Per-day figures compare trades and do not promise the trade can be repeated.
Delta: directional exposure
Select a delta to see what it means for one call contract.
Illustrative example
Out of the money, delta 0.30
Moderate sensitivity. Sold options here collect more premium than at 0.15 and are more likely to finish in the money.
One standard contract has about 30 shares of price exposure: roughly $30.00 per small $1 stock move, or $0.30 per quoted share, with other inputs held constant.
Delta is a model sensitivity, not a probability forecast. Values shown are examples, not quotes.
How the cash-secured puts tool works
- Record available cash. Cash-secured put candidates are sized against the cash collateral you have available.
- The scanner reviews listed puts in your expiration window and screens by delta ceiling, liquidity and spread.
- Candidates are compared on premium, return on collateral, breakeven, distance below the stock and days to expiration.
- Open a signal to inspect the payoff at expiration, including the share-ownership outcome if assigned.
Metrics you will see
| Metric | Meaning |
|---|---|
| Premium | Put bid times 100 per contract. |
| Collateral | Strike times 100. This is the cash reserved per contract. |
| Return on collateral | Premium divided by collateral. Compare it across expirations only after normalizing for days. |
| Breakeven | Strike minus premium per share, before fees. |
| Strike distance | How far below the current stock price the put strike sits. |
Worked example: collateral and breakeven
Stock reference $200. You sell one $190 put at a $3.10 bid with 13 days to expiration and reserve cash for assignment.
| Item | Calculation |
|---|---|
| Premium | $3.10 x 100 = $310 |
| Collateral required | $190 x 100 = $19,000 |
| Return on collateral | $310 / $19,000 = 1.63% over the holding period |
| Breakeven at expiration | $190 - $3.10 = $186.90 |
| Theoretical worst case | Stock to $0: $310 - $19,000 = -$18,690 |
If the stock stays above $190, the put expires worthless and you keep $310. If it finishes below $190 you are assigned 100 shares at $190, an effective $186.90 after premium.
Risks to understand
- Assignment means owning the stock at a price that may be above the market. The premium cushions only a small part of a large decline.
- Capital is committed until expiration or until you close the position, which has an opportunity cost.
- Early assignment is possible before expiration.
- A high premium frequently signals elevated risk, such as earnings or news, rather than a bargain.
Access
Strategy tools are part of Premium. A Free account can record holdings and cash and browse universe research. Registration alone is not a Premium subscription.
Eligible new customers can begin a 7-day Premium trial. A payment method is required, and the selected plan bills automatically at the end of the trial unless canceled. Registration alone is not a Premium subscription.
Frequently asked questions
Learn more
- Cash-Secured Puts: Collateral & AssignmentCalculate put premium, cash collateral, expiration breakeven and downside exposure. Learn why premium income does not eliminate share ownership risk.
- Options Assignment: Share Delivery & RiskUnderstand exercise, early assignment, share delivery and expiration risk. Learn why covered positions and defined-risk spreads still need active review.
- Options Delta: Sensitivity, Not a GuaranteeLearn what delta measures, how call and put deltas differ, and why a delta-based probability estimate is not a guaranteed assignment or profit forecast.
- Options Expiration, DTE & Return ComparisonsUnderstand days to expiration, exercise and assignment timing, and why normalized or annualized returns are comparisons rather than income promises.
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Research the trade before you place it
Create a free account to record holdings and cash and browse universe research. Premium adds the strategy tools. Eligible new customers can start a 7-day Premium trial; a payment method is required and the plan bills automatically unless canceled. Registration alone is not a Premium subscription.