Selling a cash-secured put earns premium and obligates you to buy the stock at the strike if assigned — a way to get paid while waiting to buy a stock cheaper.
Open the Cash Secured Put calculator →Sell a cash-secured put when you would genuinely like to own a stock at a lower price and are happy to be paid while you wait. You set aside the cash to buy 100 shares at the strike, which is what makes it "secured".
If the stock stays above the strike, the put expires worthless and you keep the premium; if it falls below, you buy the shares at the strike — at an effective price reduced by the premium you collected.
Your risk is essentially that of owning the stock from the strike, minus the premium. A sharp decline still leaves you buying shares that are now worth less, so only sell puts on names you want to hold.
It is the first half of the wheel strategy: get assigned, then sell covered calls. If you want to avoid assignment, you can roll the put down and out for additional credit.
Use the free OptionProfit Cash Secured Put calculator to load a live option chain, build the trade, and instantly see the payoff chart, breakevens, probability of profit, Greeks and a Monte Carlo simulation of outcomes.
Enough to buy 100 shares at the strike — for a $47 strike that is $4,700 per contract, held aside in case you are assigned.
You buy 100 shares at the strike. Many traders then sell covered calls against them, continuing the wheel.
Same payoff, but a cash-secured put has the cash reserved to buy the shares, while a naked put uses margin and carries higher risk.
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