Cash-Secured Put Calculator

A cash-secured put is a short put option backed by enough cash to buy the stock if assignment happens. The calculator above lets you adjust the stock price, put strike, premium, expiration, implied volatility, and snapshot time to estimate the short put’s profit and loss across different stock prices.

The calculator reports option results on a per-share basis, which matches how listed option premiums are quoted. A standard U.S. equity option contract usually controls 100 shares, so multiply the displayed per-share result by 100 outside the calculator if you want a rough one-contract estimate. The model does not include commissions, bid-ask spreads, taxes, dividends, margin interest, or broker-specific assignment procedures.

What the Calculator Does

The cash-secured put calculator models the profit and loss from selling a put option. The “cash-secured” part means you reserve enough cash to buy the shares at the strike price, but that reserved cash is not shown as a separate investment return in the chart.

At expiration, the calculator behaves like a standard short put payoff model. If the stock is above the strike, the put expires worthless and the seller keeps the premium. If the stock is below the strike, the seller’s profit falls as assignment becomes economically likely.

Before expiration, the calculator switches to a mark-to-market estimate. The put may still have time value, so the result can change with implied volatility, time remaining, and the risk-free rate.

Inputs

• Stock Price is the current stock price used to anchor the scenario and infer implied volatility from the premium.
• Strike Price is the price at which you may be required to buy the stock if the put is exercised or assigned.
• Expiration is the number of days until the short put expires.
• Premium is the put premium received per share. If the option quote is $2.50, the calculator uses 2.50.
• Implied Volatility is inferred from the premium by default. You can move the implied volatility input to override that model value for pre-expiration scenarios.
• Risk-Free Rate is used by the option-pricing model before expiration. For simple expiration payoff work, many users leave it at 0%.
• Snapshot Time is the point in time being analyzed. Set it equal to expiration to view the expiration payoff, or move it earlier to estimate a pre-expiration mark-to-market value.

How to Read the Results

The chart shows the short put’s profit and loss across a range of possible stock prices. Green areas are profitable outcomes, and red areas are losing outcomes. The vertical strike marker shows where the short put begins to have intrinsic value, while the breakeven marker shows where the received premium exactly offsets the assignment loss.

The summary below the chart highlights maximum profit, breakeven price, and maximum modeled loss. For a cash-secured put, maximum profit is capped at the premium received. The downside can be much larger because the stock can fall far below the strike.

Losses are shown as negative profit and loss values. For example, a maximum loss amount of $92.50 per share will appear as -$92.50 in the summary.

Cash-Secured Put Formulas

At expiration, ignoring commissions, taxes, dividends, financing costs, and interest on reserved cash, the short put’s per-share profit and loss is:

Where:

• $S_T$ is the stock price at expiration.
• $K$ is the put strike price.
• $P$ is the put premium received per share.

The key expiration values are:

The cash reserved is larger than the maximum loss amount because you receive the premium upfront. If assignment happens, the premium reduces your effective purchase price.

Example

Suppose a stock trades at $100. You sell a 45-day put with a $95 strike and collect a $2.50 premium per share.

At expiration:

• Maximum profit is $2.50 per share.
• Breakeven price is $95 - $2.50 = $92.50.
• Maximum loss amount is $95 - $2.50 = $92.50 per share, assuming the stock falls to zero.
• Cash reserved is $95 per share, or $9,500 for one standard 100-share contract.

Here are three possible expiration outcomes:

The second row shows why breakeven matters. Even though assignment may happen below the strike, the received premium lowers the effective purchase price to $92.50. The third row shows the real risk: if the stock falls sharply, the premium provides only limited protection.

Expiration Payoff vs. Pre-Expiration Value

If the snapshot time is set to expiration, the calculator uses the put’s intrinsic value. In that case, implied volatility no longer changes the final payoff because the option has no time value left.

If the snapshot time is earlier than expiration, the chart estimates what the short put may be worth before it expires. That estimate depends on the remaining time, implied volatility, and interest-rate input. Treat the pre-expiration line as a scenario model, not as a live broker quote.

What the Calculator Does Not Include

• Interest on cash collateral. Some accounts earn interest on reserved cash, but this calculator does not add that return.
• Dividends. Dividends can affect put pricing and assignment economics.
• Early assignment. U.S. equity options are usually American-style, so assignment can happen before expiration.
• Taxes. Tax treatment can differ depending on whether the put expires, is closed, is rolled, or is assigned.
• Transaction costs. Commissions, bid-ask spreads, and slippage reduce real returns.
• Margin treatment. The calculator assumes a cash-secured framing, not naked put margin requirements.

Frequently Asked Questions

Is this calculator per share or per contract?

It is per share. Option premiums are quoted per share, so a $2.50 premium means $2.50 in the calculator. For a standard 100-share equity option contract, multiply the per-share result by 100 outside the calculator.

How much cash do I need for a cash-secured put?

A fully cash-secured put usually reserves the strike price multiplied by 100 shares per standard contract. A $95 strike requires $9,500 of cash per contract before considering commissions or broker-specific rules. The premium lowers your economic breakeven, but the cash must still be available for assignment.

What is the maximum profit on a cash-secured put?

The maximum profit is the premium received. If the put expires worthless, you keep the premium and the cash collateral is released.

What is the breakeven price?

The breakeven price is the strike price minus the premium received. With a $95 strike and a $2.50 premium, breakeven is $92.50.

What happens if the stock falls below the strike?

The put is in the money, and assignment becomes more likely as expiration approaches. If assigned, you buy the stock at the strike price. The premium reduces your effective cost, but it does not protect you from a large stock decline.