Free tool
Cash-secured put calculator
Before you sell a put, know four numbers: how much cash it ties up, where you break even, what it pays on that cash, and how far the stock can fall before you lose money. Plug in the trade and this works them out.
Example numbers are filled in. Change any box and the results update. Educational only, not financial advice.
How the numbers work
- Cash secured: strike × 100 × contracts. This is what you'd pay if assigned.
- Premium collected: premium per share × 100 × contracts, minus fees.
- Break-even: strike minus the premium per share (after fees). If you're assigned, this is your real cost per share.
- Return on cash: premium collected ÷ cash secured, for this one trade.
- Annualized return: the return scaled to a year (× 365 ÷ days). It assumes you could repeat the same trade all year, which rarely happens exactly. Treat it as a way to compare trades.
- Stock can drop before a loss: how far the stock can fall from today's price before it's below your break-even at expiration.
New to puts? Start with Step 1: How to sell a cash-secured put. Once you're assigned, use the covered call calculator, and log every trade in the free wheel tracker.
Questions
What is a good return on a cash-secured put?
It depends on the stock and how much risk you take. Higher returns usually mean a strike closer to the stock price or a more volatile stock, which means a bigger chance of being assigned. I skip puts that pay less than 12% a year on the cash secured, but that is my own rule, not a target for everyone.
How is break-even calculated for a cash-secured put?
Strike price minus the premium you collected per share. If you sell a $50 put for $1.00, your break-even is $49. Above that at expiration, you keep a profit.
Does annualized return mean I will make that much in a year?
No. It only shows what the return would be if you could repeat the same trade, with the same result, all year. Use it to compare trades with different expirations.