Strategy Overview
Low RiskBeginner FriendlyNeutralBullish
A cash-secured put involves selling put options while holding enough cash to buy the shares if assigned. This strategy lets you get paid to wait for a better entry price on stocks you want to own.
Max Profit
Limited to premium received
Max Loss
Strike price - premium (if stock goes to $0)
Breakeven
Strike price - premium received
Probability
~70% win rate
hist. est.
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Example Setup Calculator
$
Credit Received
$250
Max Profit
$250
Max Loss
$9250
Breakeven
$92.50
Strategy Components
SELL OTM PUT
Sell OTM put with cash secured
When to Use
- You want to buy shares at a lower price
- You are neutral to bullish on the stock
- You have cash to secure the position
- You want income while waiting
Best Market Conditions
- Elevated IV for better premiums
- Support levels clearly defined
- Stable to bullish market
Best Practices
- Only sell puts on stocks you want to own
- Choose strikes at support levels
- Maintain sufficient buying power
- Consider assignment implications
Ready to Trade?
Review Cash-Secured Put and practice it in paper trading with the school workflow.
Paper Trading