Cash-Secured Put Calculator
Calculate the premium income, breakeven, and return on capital for selling cash-secured puts. Enter your strike price and premium to see max profit, max loss, and capital requirements.
Enter your strike price and premium, then click Calculate to see your cash-secured put income, breakeven, and return on capital.
For educational purposes only. Not financial advice. Read full disclaimer
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Cash-Secured Put Formulas
Premium Collected = Premium per Share x 100 x Contracts
Cash Required = Strike Price x 100 x Contracts
Max Profit = Premium Collected
Max Loss = (Strike Price - Premium) x 100 x Contracts (if stock goes to $0)
Breakeven = Strike Price - Premium per Share
Return on Capital = Premium Collected / Cash Required x 100
Worked Examples
Example 1: AAPL Cash-Secured Put
You sell 1 put at the $145 strike for a premium of $4.00 per share.
- Premium Collected = $4.00 x 100 = $400
- Cash Required = $145 x 100 = $14,500
- Max Profit = $400
- Max Loss = ($145 - $4.00) x 100 = $14,100 (if AAPL goes to $0)
- Breakeven = $145 - $4.00 = $141.00
- Return on Capital = $400 / $14,500 = 2.76%
Example 2: SPY Cash-Secured Puts (2 Contracts)
You sell 2 puts at the $440 strike for a premium of $6.50 per share.
- Premium Collected = $6.50 x 100 x 2 = $1,300
- Cash Required = $440 x 100 x 2 = $88,000
- Max Profit = $1,300
- Max Loss = ($440 - $6.50) x 100 x 2 = $86,700
- Breakeven = $440 - $6.50 = $433.50
- Return on Capital = $1,300 / $88,000 = 1.48%
How to Use This Calculator
- Enter the strike price — the strike of the put option you plan to sell. You must hold enough cash to buy shares at this price.
- Enter the premium received — the per-share price you receive for selling the put option.
- Enter the number of contracts — each contract covers 100 shares and requires cash equal to the strike times 100.
- Click Calculate — review your premium income, max loss, breakeven, cash required, and return on capital to decide if the trade fits your income goals.
Frequently Asked Questions
- What is a cash-secured put?
- A cash-secured put is an options strategy where you sell a put option and hold enough cash in your account to buy 100 shares at the strike price if assigned. You collect the premium upfront as income. If the stock stays above the strike, you keep the premium. If the stock falls below the strike, you buy shares at the strike price minus the premium received.
- What is the risk of selling cash-secured puts?
- Your maximum loss occurs if the stock goes to zero. In that case, you lose the full strike price minus the premium received, per contract. The risk profile is similar to owning the stock at the breakeven price. You should only sell cash-secured puts on stocks you are willing to own at the breakeven price.
- What is the wheel strategy?
- The wheel strategy combines cash-secured puts with covered calls. You start by selling a cash-secured put. If assigned, you own the stock and then sell covered calls against it. If the stock is called away, you start again by selling another cash-secured put. The goal is to generate consistent income from premiums in both directions.
- How is return on capital calculated?
- Return on capital equals the premium collected divided by the cash required (strike price times 100 shares times contracts). This measures the income yield on the cash you must hold as collateral. A higher return on capital means more income per dollar of buying power used.
- When is the best time to sell cash-secured puts?
- Cash-secured puts work best when implied volatility is elevated, which inflates the premium you collect. Selling puts on stocks you want to own at a discount, during market pullbacks, or after volatility spikes can provide attractive entry points and premium income. Avoid selling puts before earnings unless you are comfortable with assignment risk.