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BullishIncome strategyBeginner

Cash-Secured Put

Sell a put while holding cash – either keep the premium or buy the stock at your desired price.

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When you want to buy a stock and are waiting for a dip. Improves returns vs. limit order.

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  1. Pick a stock you would buy at a discount
  2. Reserve cash equal to strike × 100
  3. Sell a put at your desired strike, 30–45 DTE
  4. If expires worthless → keep premium and repeat
  5. If assigned → buy shares at strike (effective price strike − premium)
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MSFT trades at 420 USD, you would happily buy at 400. Sell a 30-day 400 put for 5.50 USD (= 550 USD premium). If above 400 → keep 550 USD. If below → buy shares effectively at 394.50 USD.