Free calculator
Cash-secured put calculator
Work out the premium, capital required, breakeven and annualized return of a cash-secured put, and see what assignment actually costs.
Inputs
Result
- Gross premium
- $180.00
- Cash required
- $9,500.00
- Net cost basis if assigned
- $93.20
- Breakeven
- $93.20
- Downside buffer
- 6.80%
- Effective purchase discount
- 1.80%
- Period return
- 1.89%
- Annualized (compound)
- 25.65%
- Annualized (simple)
- 23.05%
- Max loss (stock to zero)
- -$9,320.00
Payoff and assignment scenarios
| Move | Underlying | P/L |
|---|---|---|
| -20% | $80.00 | -$1,320.00 |
| -10% | $90.00 | -$320.00 |
| -5% | $95.00 | $180.00 |
| spot | $100.00 | $180.00 |
| +5% | $105.00 | $180.00 |
| +10% | $110.00 | $180.00 |
| +20% | $120.00 | $180.00 |
If the put expires worthless you keep the $180.00 premium. If assigned you buy 100 shares at $95.00 an effective $93.20 per share after premium, and the shares can keep falling below that level.
Assumptions and limits
- Held to expiration; European-style settlement is assumed for the payoff.
- No commissions, fees or early assignment are modelled.
- Annualized return compounds the period return over 365 days.
What the calculator measures
Cash required is strike x 100 x contracts. The breakeven is the strike minus the premium per share, which is also your effective purchase price if assigned.
The period return is premium divided by the cash secured. Annualized figures compound that period return over 365 days and are shown separately as a simple figure because short-dated annualized returns are easily overstated.
The risk the premium does not remove
A cash-secured put has the same downside as owning the shares below the breakeven. The premium is a small cushion relative to a large decline, so position sizing and strike selection matter more than the headline yield.
FAQ
- How is cash required calculated?
- Strike x 100 x contracts, held in cash so assignment cannot create a margin call.
- What is the breakeven?
- Strike minus premium per share. Below it the position is worth less than the cash committed.
- Should I use annualized return?
- Treat it as a comparison aid, not an expectation, especially for very short expirations.