Cash-Secured Put Calculator
Visualize the P/L for any cash-secured put position.
Option Parameters
Key Metrics
Enter parameters and calculate to see results.
Enter parameters and calculate to view P/L chart
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What Is a Cash-Secured Put?
A cash-secured put (also called a short put) involves selling a put option while holding enough cash to buy the shares if the option is assigned. It's a bullish strategy with limited profit and substantial risk—you collect a premium upfront in exchange for the obligation to buy shares at the strike price. Compared to buying 100 shares of stock, selling a cash-secured put has less risk.
Learn the strategy in-depth with the cash-secured put guide.
Key Characteristics
- Max Profit: Limited to the total premium you receive to enter the trade.
- Max Loss: (Strike price − put sale price) × 100 × number of contracts. Occurs if the stock falls to $0.
- Breakeven: Strike price − put sale price
- Outlook: Moderately bullish, and willing to own shares at the strike price
How to Read the P/L Chart
The cyan line (T+0) shows your theoretical P/L at trade entry. Before expiration, the curve is smoother because the option still has time value. When the stock is above your breakeven, time decay works in your favor. You'll see your profits increase over time.
T+0 means "today plus 0 days," while T+30 would mean "today plus 30 days." It's a common convention for payoff diagrams that show multiple points in time.
The white line (Expiration) shows your profit or loss at expiration. If the stock is above the strike price, the put expires worthless, and you keep the full premium received. As the stock falls below your breakeven, losses increase. This payoff graph highlights the strategy's capped upside and stock-like downside risk.
The stock comparison line shows the P/L of buying shares at the current stock price. If the stock rallies hard, the CSP underperforms since your profit is capped. But at every price below your entry, the cash-secured put outperforms because your breakeven is lower, giving you a cushion of downside protection.
Using This Calculator
- Stock Price: The price of the stock at trade entry.
- Strike Price: The price at which you may be obligated to buy shares, which happens if the put is ITM and you hold it through expiration. The cash set aside for this scenario is used to buy the stock.
- Premium: The price at which you sell the put. To find your total credit and max profit, multiply the entry price by 100 and by the number of contracts sold. For example, selling 5 puts at $1.50 each yields a max profit of $1.50 × 100 × 5 = $750.
- Days to Expiration: How much time is left until the option expires.
- Implied Volatility: The market's expectation of future stock price movements, as implied by the stock's option prices.
The calculator also displays your cash requirement (strike × 100 × contracts) and the maximum return on capital (max profit ÷ cash requirement), which shows your potential return on your tied-up cash for the duration of the trade.
Cash-Secured Put vs Buying Stock
A cash-secured put has capped upside but provides a lower breakeven than buying shares outright. If the stock rallies hard, you underperform—your profit is limited to the premium received. But if the stock stays flat or falls, your effective entry price is lower (strike minus premium), giving you a cushion compared to simply buying shares. If you expect a big move higher, buying the stock captures more of that upside. If you expect the stock to stay flat or rise modestly, the cash-secured put offers better risk/reward.
Cash-Secured Put vs Short Put on Margin
A cash-secured put is technically a short put, but it reflects a more conservative approach: setting aside the cash to acquire the full stock position if the put is assigned.
A short put on margin is selling a put without the cash reserve needed to buy the stock if it is assigned. This is a more speculative strategy, as it involves trading rather than a long-term approach. With a short put on margin, you'll need to close the position at a loss before expiration without the cash needed to buy the stock. And if the stock price rallies after that, you don't recover any losses. With a cash-secured put, you're buying the stock if it's assigned, which recovers losses as the stock price rallies.
A Note on Assignment
If the stock closes below the strike at expiration, you'll be assigned and must buy 100 shares per contract at the strike price. Make sure you have enough cash to cover this—strike price × 100 × number of contracts. For example, selling 5 contracts of a $150 put requires $75,000 in cash. If assigned, your effective cost basis is the strike minus the premium received.
Learn More
If you got assigned on a cash-secured put, you can use the covered call to generate income while you wait to sell at a higher price. Combining these two strategies is known as the wheel.
For a deeper dive into cash-secured put mechanics, examples, and management techniques, read our comprehensive Cash Secured Put Strategy Guide.
Related Calculators
- Covered Call Calculator — Sell calls after assignment (the wheel)
- Bull Put Spread Calculator — Defined-risk version
- Long Put Calculator — Buy puts instead of selling
