Cash-Secured Put Calculator

Your total obligation is the strike times 100 times the contracts — $5,000 for one $50 put — because that is what the shares will cost if you are assigned. The premium you receive counts toward it, so the cash you actually have to set aside is the strike less the premium: $4,820 on that trade. Fidelity's own worked example puts it the same way, describing a 100 put sold at $3.00 as holding $97.00 a share in cash. This page shows both figures, because the first is what you are committing to and the second is what leaves your pocket.

Per share — the number your broker quotes. A premium shown as 3.20 means $3.20 a share, which is $320 for one contract. Entering 320 here would overstate the trade a hundredfold, so the field is labelled per share and the results panel always shows the total separately.

On your broker's option chain for the ticker and expiry you are looking at. The strike is the row; the premium is the bid, the ask, or the mid depending on which side of the trade you expect to get filled. Buyers are usually closer to the ask, sellers closer to the bid.

Use the price you realistically expect to trade at. The mid is a fair planning assumption on a liquid contract with a tight spread. On a wide spread the mid can be optimistic by more than the edge you are hoping for, so run the calculation twice — once at the mid, once at the worse side — and see whether the trade still makes sense.

It does not change the payoff at expiration — that depends only on where the stock finishes. It is used for the percentage move required to reach breakeven, and for the leverage comparison. Both are context for deciding whether the trade is plausible, not part of the P/L arithmetic.

Enter the total contracts and the weighted average premium you actually paid or received. If the fills were far apart, running each block separately and adding the results is more honest, because a single average hides how different the two breakevens are.

Yes. Copy link puts every input into the URL, so the link you paste opens with the answer already on screen — useful for a second opinion or for your own notes. Download CSV gives you the summary plus the whole payoff curve, which opens straight into a spreadsheet.

The payoff is identical; the collateral is not. Cash-secured means the full strike is set aside, so you can always honour the assignment. Naked means it is held on margin, which frees up capital and turns the same position into a leveraged one — the loss is the same size against a much smaller base.

No — it prices a put you have already chosen. Finding candidates means screening a universe of contracts against live prices, which is a different kind of tool with a live data feed behind it. This page deliberately has no data dependency, which is also why it works instantly and never shows you a stale quote.

Because they describe the same thing from two directions. Strike minus premium is where the trade stops making money, and it is also what the shares effectively cost you once the premium you kept is taken off. A $50 put sold for $1.80 gives $48.20 either way.

The premium, and nothing more. However far the stock rises above the strike, the put simply expires worthless and you keep what you collected. That asymmetry — capped gain, large downside — is the defining feature of selling puts and is why the return figures on this page are measured against the cash committed rather than against the premium.

The strike less the premium, times 100, times the contracts — reached if the stock goes to zero. On a $50 put sold at $1.80 that is $4,820 per contract. The same downside as owning the stock from $50, minus the premium.

The cash, net of the premium received. Measuring a premium against itself produces a spectacular percentage and tells you nothing. Some sites use the margin requirement instead, which for a naked put is far less than the strike and inflates the figure considerably — worth checking whenever you see a cash-secured put yield that looks too good.

The wheel is: sell cash-secured puts until you are assigned, then sell covered calls on the shares until they are called away, then start again. This page is the first half. The effective purchase price it shows is exactly the cost basis you carry into the covered call, and the link below the results passes it across for you.

Almost always one of two conventions rather than an arithmetic difference. First, the denominator: this page divides by net capital — what the shares cost you less the premium collected, which is the buy-write debit and the figure shown beside the result. Fidelity's published covered-call example instead divides by the gross stock price, which gives a slightly lower percentage. Second, the day count: we annualise on a 365-day year, several brokers use 360, and that alone changes the figure by about 1.4%. Neither convention is wrong, but they are not interchangeable — if you are comparing two trades, make sure both were measured the same way.

Not on this page, deliberately: P/L before expiry depends on implied volatility, interest rates and the time remaining, and any tool that shows it is running a pricing model whose inputs you have to supply and trust. This page answers the narrower question exactly rather than the broader one approximately. If you want the broader one, the Black-Scholes calculator runs that model openly and shows every step of it.

You buy 100 shares per contract at the strike, the cash leaves your account, and you keep the premium. You now own the stock at an effective price of strike minus premium. It is not a penalty and there is no fee for it beyond your broker's assignment charge — it is the outcome the strategy is built around.

Yes. US equity options are American-style, so a short put can be assigned at any time, though it is uncommon while meaningful time value remains. Deep in-the-money puts near expiry are the realistic case. Nothing on this page models early assignment.

Buy the put back before expiry. If the stock has fallen, that will cost more than you received — the loss is real either way, and closing simply takes it in cash instead of in shares. Rolling to a lower strike or a later date is the other option, and is best modelled by running this calculator once for each leg.

Because at expiration there is no time value left — an option is worth exactly its intrinsic value, and intrinsic value needs only the strike and the finishing stock price. Volatility matters for what an option is worth before expiry, which is a pricing question rather than a profit question. That is what the Black-Scholes calculator is for — it takes a volatility and returns a theoretical price.

Only if you enter them. Put the total for the round trip in the commissions field and they come off the profit and move the breakeven — a $13 commission on one contract shifts the breakeven by 13 cents, which is small but not nothing on a tight trade.

No. Options tax treatment depends on your country, your holding period, whether the position was assigned or closed, and in some cases whether it was part of a straddle. Treat every figure here as pre-tax and check your own situation.

Ignored. A dividend reduces the stock price on the ex-date, which affects where the stock finishes, and for anyone short a call it raises the chance of early assignment the day before the ex-date. Neither effect is modelled.

The calculator assumes the standard US equity multiplier of 100 shares per contract. After a split, a spin-off or a merger a contract can be adjusted to a non-standard deliverable, and index options use other multipliers. In those cases the per-contract figures here will be wrong.

No. The whole calculation runs in your browser; nothing is sent to a server, there is no account, and the page works the same with the network switched off after it loads.