How to Use This Cash-Secured Put Calculator
Enter any U.S. stock or ETF ticker symbol above to instantly load the live options chain. The calculator opens in Cash-Secured Put mode. Select an expiration date from the tab strip, then click a put strike price in the options chain table to see all key metrics in real time.
Toggle between Full Margin and Half Margin to model how leverage affects your annualized return. Use the Covered Call tab at any time to analyze the other leg of the wheel strategy on the same ticker.
How to Calculate Cash-Secured Put Return
A cash-secured put position has a defined profit and loss profile. Here are the core formulas, with a worked example using a stock at $50.00 and a $47.50 strike put selling for $1.50 premium (30 days to expiration).
Net Credit
Premium Received
$1.50 per share · $150 per contract
The premium you receive when selling the put. This is your maximum profit if the put expires worthless.
Breakeven at Expiry
Strike Price − Premium
$47.50 − $1.50 = $46.00
The stock price at which the position neither gains nor loses.
Maximum Profit
Premium × Shares
$1.50 × 100 = $150
Achieved when the stock closes at or above the strike price at expiration — the put expires worthless.
Maximum Loss
(Strike − Premium) × Shares
($47.50 − $1.50) × 100 = $4,600
Occurs if the stock falls to zero after assignment.
Return at Full Margin
Premium ÷ Strike Price
$1.50 ÷ $47.50 = 3.16%
Return on the full cash collateral reserved to secure the put.
Return at Half Margin
Premium ÷ (Strike × 0.5)
$1.50 ÷ $23.75 = 6.32%
Return if you use 50% margin. Doubles your return on capital, but adds leverage risk.
Annualized Return
Return × (365 ÷ DTE)
3.16% × (365 ÷ 30) = 38.4% annualized
Scales the return to a full year for comparison across expirations.
Downside Buffer (%)
Premium ÷ Strike Price
$1.50 ÷ $47.50 = 3.16%
How far the stock can fall from the strike before you incur a net loss.
How to Choose a Strike Price for a Cash-Secured Put
Strike selection for cash-secured puts is a balance between premium income and assignment probability. Lower strike prices reduce assignment risk but generate less premium. Higher strikes (closer to the stock price) generate more premium but increase the odds you'll be assigned.
| Strike Type | Premium | Assignment Risk | Best For |
|---|---|---|---|
| Deep OTM (15%+ below price) | Low | Very Low | Maximum safety; minimal income |
| Moderate OTM (10–15% below price) | Low–Moderate | Low | Conservative income with low assignment risk |
| Slight OTM (5–10% below price) | Moderate | Low–Moderate | Popular balance of income and safety (most common) |
| Near OTM (0–5% below price) | Moderate–High | Moderate | Higher income; comfortable buying at near-market price |
| ATM or ITM (at or above price) | High | High–Very High | Aggressive income; expect assignment |
Cash-Secured Put vs. Covered Call
Cash-secured puts and covered calls are two sides of the same coin — both are premium-selling strategies with capped upside and defined downside.
| Factor | Cash-Secured Put | Covered Call |
|---|---|---|
| What you need | Cash equal to strike price × 100 | 100 shares of stock per contract |
| Option you sell | Sell to open a put | Sell to open a call |
| Breakeven | Strike price − premium | Stock price − premium |
| Max profit | Premium collected (put expires worthless) | Premium + (Strike − Stock) if called |
| Max loss | (Strike − Premium) × shares (stock to zero) | Net debit × shares (stock to zero) |
| Assigned outcome | Must buy 100 shares at strike price | Shares called away at strike |
| Best market outlook | Neutral to slightly bullish | Neutral to slightly bullish |
| Common use case | Acquiring stock at a discount while earning premium | Generating income on shares already owned |
| Part of wheel strategy | ✓ First leg | ✓ Second leg |
The wheel strategy combines both: sell a cash-secured put until assigned, then sell covered calls against those shares until called away, then repeat.
When Should You Sell a Cash-Secured Put?
| Favorable conditions | Unfavorable conditions |
|---|---|
You want to own the stock and would be happy buying it at the strike | You don't want to own the stock — assignment would be an unwanted outcome |
Implied volatility (IV) is elevated — put premiums are richer | The stock has poor fundamentals or is in a confirmed downtrend |
The stock has pulled back and you see it as a buying opportunity | Earnings or a major binary event is approaching — gap-down risk increases |
You're selling 20–45 DTE for optimal theta decay | Implied volatility is very low — premiums are too small to justify the obligation |
You have sufficient cash reserved to cover the full obligation if assigned | You lack the full cash margin to cover assignment on the position size |
Frequently Asked Questions
How do you calculate cash-secured put return?▾
What is the breakeven on a cash-secured put?▾
What happens if a cash-secured put is assigned?▾
What is "return at full margin" vs "half margin" on a cash-secured put?▾
What is the difference between a cash-secured put and a covered call?▾
What is the wheel strategy?▾
How do you choose a strike price for a cash-secured put?▾
Can you lose money selling cash-secured puts?▾
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