A cash secured put calculator turns one short contract into hard numbers: the credit you collect, the static return on the cash you set aside, your breakeven, and the annualized yield if it expires worthless. The payoff shape is simple. You keep the full credit as max profit, breakeven sits at the strike minus that credit, and the worst case is a stock that falls toward zero while you are assigned shares well above the new market price. Holding strike times 100 in cash means you are pre-funded to buy the shares if assigned. This article walks the income math, a worked example with annualization, and when this trade beats a covered call. It is for education, not financial advice.
This strategy pairs naturally with selling calls on assigned shares; see what is a covered call for the other half of the wheel.
What this calculator computes
The tool takes your strike, the credit received per share, days to expiration, and the underlying price, then returns the dollar credit, return on capital, breakeven, effective cost basis if assigned, and annualized yield. A cash secured put is one short contract where you hold enough cash to buy 100 shares at the strike. The Options Industry Council frames it as getting paid while you wait to buy a stock at a price you like.
Cash-Secured Put Calculator
Model selling a cash-secured put: collect premium up front and set aside cash equal to the strike times 100 per contract as collateral to buy the shares if assigned. Shows premium income, static and annualized return on collateral, effective buy price if assigned, breakeven, max profit, max loss, probability of assignment, and the Black-Scholes Greeks of the short put. Built for income traders who want to get paid to set a buy limit on a stock they would be happy to own.
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This calculator models cash-secured put profit and loss at expiration using standard US options conventions (100 shares per contract, cash collateral equal to strike times 100 per contract). The Black-Scholes premium, Greeks, and probability of assignment are model estimates, not guarantees. It does not model early assignment, dividends, commissions, bid-ask slippage, taxes, or mid-trade profit and loss (which differs from expiration profit and loss because of theta and vega). Returns assume the premium is kept and capital is re-deployed; they are not guaranteed annual yields. For education only, not financial advice. Verify with your broker before trading.
Outputs include the credit (premium times 100 per contract), static return if not assigned, breakeven, effective buy price if assigned, max profit, max loss, and annualized return. Inputs assume US equity options, one contract equals 100 shares, and results measured at expiration. Mid-trade value differs because of time decay and volatility. It fits income sellers who genuinely want to own the underlying at a discount, not traders chasing yield on names they would hate to hold.
How to use the calculator
The math behind it
The income math is short and worth memorizing. The dollar credit equals premium times 100. Your static return, the yield if it expires worthless, equals premium divided by the capital you set aside. Reserve the full strike times 100 for the conservative figure; reserve strike minus premium for the return on net cash actually tied up. Breakeven is the strike minus the credit. Get assigned and your effective cost basis is also strike minus that credit, since it lowers what you really pay per share.
- Max profit: the credit kept, reached when the stock stays at or above the strike.
- Max loss: (strike minus premium) times 100 per contract, if the stock goes to zero.
- Breakeven: strike minus the credit per share.
- Annualized return: periodic return times 365 divided by days to expiration.
Here is a worked example. You sell one 50-strike contract for 1.50 with 30 days to expiration, holding 5,000 in reserve. The credit is 150. Static return on the full 5,000 is 150 divided by 5,000, or 3.0% over 30 days. Annualized, that is 3.0% times 365 divided by 30, roughly 36.5%. Breakeven is 48.50. If assigned, you own 100 shares at an effective 48.50 even though the strike was 50.
| Stock at expiration | Put value | P&L per contract |
|---|---|---|
| 55.00 | 0 | +150 (full premium) |
| 50.00 | 0 | +150 (max profit) |
| 48.50 | 1.50 | 0 (breakeven) |
| 45.00 | 5.00 | -350 |
| 0.00 | 50.00 | -4,850 (max loss) |
Two Greeks matter most. Theta works for you, since the short put loses value as expiration nears. Vega works against you when implied volatility spikes, because a richer put costs more to buy back. For a deeper view of payoff diagrams, our long put calculator shows the mirror-image buyer side.
Cash secured put vs covered call: when to use it
This trade and a covered call share the same payoff shape. Both cap upside, both collect a credit, and both carry full downside in the underlying. The difference is your starting point and the capital involved. A covered call needs 100 shares you already own. The short put needs cash you have not yet spent on stock. Want to own a name cheaper than today’s price? Selling pays you to wait at your target entry, which the covered call cannot do because it assumes you already bought in.
| Attribute | Cash secured put | Covered call |
|---|---|---|
| Starting position | Cash on hand | 100 shares owned |
| Capital tied up | Strike times 100 | Cost of the shares |
| If assigned/called | Buy shares at strike | Sell shares at strike |
| Best when | You want to buy cheaper | You already hold and want income |
Picture a stock at 52 that you would happily own at 50. Selling the 50-strike contract pays you 1.50 now. If it dips to 49 by expiration, you buy at an effective 48.50 and keep the credit edge. The covered call cannot match this because you would have bought at 52 first, eating a worse basis. When you want shares at a discount and have the cash ready, selling wins. When you already hold the stock and just want yield, the covered call is the simpler, lower-friction choice. Compare the two-leg mechanics in the call and put calculator.
Risk and assignment
Assignment is the headline risk. A short put can be assigned early, most often when it goes deep in the money, leaving you long 100 shares at the strike. Worst case is a sharp drop: a stock that craters to zero turns the 50-strike trade into a 4,850 loss after the credit. Pin risk near the strike at expiration adds uncertainty about whether you end up with shares. The reserved cash is your secured backing, so margin is not required, but it stays locked while the trade is open.
Read the OCC’s Characteristics and Risks of Standardized Options before trading. Definitions and assignment mechanics are detailed by the Options Industry Council. These results are at expiration; mid-trade profit and loss moves with theta and vega. A short put carries real downside far beyond a long option’s capped loss, so size positions only on stock you truly want to own. The cash secured put calculator gives you breakeven, static return, and annualized yield in one pass, the income picture every seller should check before placing the order.
FAQ
What is a cash secured put?
A cash secured put is a short put backed by enough cash to buy 100 shares at the strike. You collect a credit up front and agree to buy the stock at the strike if assigned, which is why the cash is set aside as security.
How is the return on a cash secured put calculated?
Static return equals the premium divided by the capital set aside, usually strike times 100. Annualize it by multiplying the periodic return by 365 and dividing by days to expiration. A 3% return over 30 days annualizes to roughly 36.5%.
What is the breakeven on a cash secured put?
Breakeven is the strike minus the credit received. Sell a 50-strike contract for 1.50 and your breakeven is 48.50. Below that price you have an unrealized loss on the shares you would be assigned.
What is the max loss on a cash secured put?
Max loss is the strike minus the credit, times 100, reached only if the stock falls to zero. For a 50-strike contract sold at 1.50, that worst case is 4,850. The credit kept is your max profit.
Is the interactive calculator available yet?
The interactive cash secured put calculator is coming soon. Until it goes live, use the formulas and worked example above to find your credit, breakeven, and annualized return by hand or in a spreadsheet.