- Net premium
- +$60
- Yield on collateral
- 1.25%
- Annualized
- 15.2%
- Cash freed
- $4,800
The put expires, the cash is yours again, and you keep the premium. Most put campaigns string several of these together before an assignment.
Cash Secured Put Calculator
Enter the put and read the premium yield on your collateral, the breakeven, and the effective basis you would own the stock at if assigned. Then practice the whole campaign in a turn-based simulator. Free, in the browser, no account.
Net premium +$60 $0.60 × 100 shares
Yield on collateral 1.25% 15.2% annualized · simple
Effective basis if assigned $47.40 $48.00 strike − $0.60 premium
Strike buffer 7.69% the stock can fall this far before $48.00 is in play
If-assigned discount 8.85% below today's $52.00
Capital at risk $4,800 cash securing 100 shares at $48.00
The two ways it can end
- Shares assigned
- Cash spent
- −$4,800
- Effective basis
- $47.40
- Discount to today
- 8.85%
The cash you set aside buys the shares at the strike. For a wheel seller this is the plan, not the failure: the premium means you own them below where the stock traded when you sold the put.
- Breakeven
- $47.40
- Stock P&L vs strike
- −$120
- Premium
- +$60
- Net
- −$60
- Bought outright instead
- −$520
Below breakeven the position loses money, just far less than buying the shares outright today would have. The out-of-the-money strike and the premium are both cushion.
For education only. This page runs on your inputs, not live market data, and nothing on it is investment advice.
Practice put selling: a cash secured put simulator
Selling puts for income means waiting out an expiration between decisions. Here each turn is a full expiration cycle: sell a put, decide where the stock closes, settle. Expirations hand your cash back to sell again; an assignment hands you the shares, which is where the wheel's next leg begins. Free, no account, nothing to install.
cash-secured-put-simulator · practice position Day 0
Premium P&L ·
Equity P&L ·
Net P&L ·
Effective basis if assigned · Cash securing · Days elapsed 0 Yield on collateral · Annualized so far ·
Set up the campaign
Start from cash. Same inputs as the calculator above, or press "Follow this position" up there to carry them over.
$
Sell a put
Cash ready · stock at $52.00
$
$
Ballpark: 30 to 45 day puts near the money typically run 1 to 3% of the strike. Approximate, not a quote.
Fast-forward to expiration
Short $48.00 put · 30 days · +$60 banked
Where does the stock close at expiration?
$
Assigned at $48.00
Campaign settled
Premium P&L +$150
Equity P&L −$40
Net P&L +$110
Yield on collateral 3.13% Annualized 19.0%
Effective basis $48.00 strike − $0.90 premium = $47.10 1.1% below the market's $47.60
Assigned? Now you are selling covered calls. Carry this exact position over.
Open it in the covered call calculator Campaign ledger 0 rows
| Day | Action | Detail | Amount | Running premiumRunning |
|---|---|---|---|---|
| The ledger writes itself as you trade. Start the campaign to begin. | ||||
Simulated prices are the ones you choose. For education only.
How the math works
Seven formulas produce everything on this page. This is a calculator, not a screener: there are no live quotes here. Bring a strike and premium from your broker's chain and the math is instant. Each formula below carries its result for the page's default trade: a $52.00 stock, the $48.00 put at $0.60, 30 days, 100 shares if assigned.
Net premium
Net premium is the cash you collect the moment you sell the put.
net premium = premium per share × shares= +$60 At $0.60 per share on 100 shares, one contract's worth, you collect $60. It is yours no matter how the trade ends.
Capital at risk
Capital at risk is the cash set aside to buy the shares if assigned.
capital at risk = strike × shares= $4,800 A $48.00 strike on 100 shares means $4,800 held in cash for the life of the put. That is what "cash secured" means, and every yield on this page is measured against it.
Yield on collateral
Premium yield for a put is measured against the strike cash, not the stock price.
yield on collateral = premium ÷ strike= 1.25% $0.60 of premium on $48.00 of secured cash is 1.25% for the 30 days the put is open. The stock price is not the denominator because the strike cash is what the position actually ties up.
Simple annualized yield
Annualized yield restates one cycle's return at a full-year pace.
annualized = yield × 365 ÷ days to expiration= 15.2% 1.25% over 30 days annualizes to 15.2%. This is simple annualization: it scales linearly, does not compound, and assumes you could repeat the trade at the same terms, which markets do not promise.
Breakeven and effective basis
The premium moves your breakeven below the strike before the trade even settles.
effective basis = strike − premium= $47.40 A $48.00 strike minus $0.60 of premium is a $47.40 effective basis, and that number is your breakeven. If you are assigned, only the premium on the put that assigns you belongs to this basis; premium kept on earlier puts that expired is income from those completed trades.
Strike buffer
Strike buffer is how far the stock can fall before your strike is in play.
strike buffer = (price − strike) ÷ price= 7.69% With the stock at $52.00 and the strike at $48.00, the first 7.69% of a decline belongs to the buffer. Assignment only enters the picture below the strike.
If-assigned discount
The discount is how far below today's price you would own the stock if assigned.
discount = (price − effective basis) ÷ price= 8.85% An effective basis of $47.40 against a $52.00 stock is an 8.85% discount. It is only yours if the stock comes down to deliver it, which is the trade-off the premium is paying you to accept.
Sixty days of selling the $48 put
The calculator prices one put. Here is a campaign: sixty days of selling the same $48.00 strike in a stock we will call XYZ, starting with the stock at $52.00 and $4,800 of cash set aside to secure 100 shares.
| Day | Action | Detail | Amount | Running premiumRunning |
|---|---|---|---|---|
| 0 | Start | Stock $52.00, cash ready to secure 100 shares | · | · |
| 0 | Sell put | 30D $48.00 strike @ $0.60 | +$60 | $60 |
| 30 | Expired | Stock $49.50 (drifting down) | · | $60 |
| 30 | Sell put | 30D $48.00 strike @ $0.90 | +$90 | $150 |
| 60 | Assigned | Stock $47.60, shares assigned @ $48.00 | · | $150 |
| 60 | Buy | 100 shares @ $48.00 | −$4,800 | $150 |
Premium P&L +$150
Equity P&L −$40 100 shares @ $48.00 · stock $47.60
Net P&L +$110 60 days · 2 puts
Yield on collateral 3.13% 19.0% annualized · the income number
Effective basis $47.10 1.1% below the $47.60 mark at assignment
Effective basis $48.00 strike − $0.90 premium on the assigned put = $47.10 effective basis
Marking $47.60 against the $47.10 basis, the assigned shares sit +$50; the $60 banked on
the put that expired first makes the campaign +$110.
The second put is the interesting one. The stock drifted from $52.00 to $49.50, so the same $48.00 strike now pays $0.90 instead of $0.60. Closer to the money means richer premium and a better chance of assignment, and at day 60 the stock slips to $47.60 and the shares arrive. For a wheel seller that is not the failure case: assignment is the plan. The $0.90 collected on that put means the shares come in at an effective $47.10, below the assignment day's price. The $0.60 kept on the first put settled as its own completed trade, banked income that does not fold into this basis.
And the story does not end here. Two weeks later the stock is back at $50.00, and this exact position, 100 shares at a $48.00 basis, is where the covered call calculator's worked example picks up: the same wheel, one leg later. Or watch both legs run as one continuous cycle in the wheel strategy calculator's example, which stitches this story to its ending.
Cash secured put calculator FAQ
How does a cash secured put work?
You sell a put option and set aside enough cash to buy the stock at the strike price: a $48.00 strike means $4,800 per contract. Two things can happen at expiration. If the stock closes at or above the strike, the put expires, the cash is freed, and you keep the premium. If it closes below, you buy 100 shares per contract at the strike, and the premium you collected lowers your effective basis. Selling puts this way is the first leg of the options wheel strategy.
How do you calculate cash secured put returns?
Measure the premium against the cash securing the trade: premium divided by strike. $0.60 of premium on a $48.00 strike is 1.25% for the cycle, and yield times 365 divided by days to expiration annualizes it, 15.2% in that example. The stock price does not appear in the denominator because the strike cash, not the stock, is what the position ties up.
What happens if my cash secured put is assigned?
You buy 100 shares per contract at the strike price, paid for with the cash you set aside. Your effective basis is the strike minus the premium on the put that assigns you: assigned at $48.00 on a put that paid $0.90, you own the shares at an effective $47.10. Premium you kept on earlier puts that expired is income from those completed trades, banked separately, not part of this basis. From there most wheel sellers turn around and sell covered calls against the position; our covered call calculator picks up exactly there.
Is selling cash secured puts a good way to buy stock cheaper?
If you are assigned, you always pay less than the strike after premiums, and often less than the price on the day you sold the put. The honest caveats: the stock can keep falling well below your effective basis, and if it rallies you collect the premium but never get the shares. The calculator shows the discount and the drop scenario side by side so you can weigh both before you sell.
How much money do I need to sell a cash secured put?
The strike price times 100, per contract, held in cash: a $48.00 strike needs $4,800. Cash secured means the purchase is fully funded before you sell the put. Some brokers let you sell puts on margin for less capital, but that is a different trade with different risk.
Can I practice selling cash secured puts without real money?
Yes. The simulator on this page runs the whole campaign, free, with no account: sell a put, choose where the stock closes, and settle it. Expirations hand the cash back; an assignment hands you the shares and shows your effective basis. Each cycle compresses into one turn, so you learn the decisions fast. For order-entry practice on live chains, most major brokers offer paper trading accounts.
› Free tool · part of PremiumGuardHQ
This is the math for one put.
The tracker follows the whole wheel automatically, from your broker: premium banked as it arrives, assignments reconciled into cost basis, and the yield on every dollar of collateral.
- Every cycle detected automatically
- Cost basis reconciled through assignments
- 14-day free trial