Cash Secured Put Calculator

Calculate premium yield, effective purchase price and annualised return on the cash set aside to secure a short put.

A cash secured put, or CSP, is a put sold with the whole purchase price held in reserve behind it, and a cash secured put calculator exists to say what that reserve is being paid to sit there. The premium arrives immediately and is kept in every outcome; in exchange, the cash sits idle until the option expires or is bought back, and if the shares fall below the strike they are assigned at that strike whether or not they are still wanted.

Formula: effective cost = strike - premium; return on cash = premium / (strike x 100)

Your figures

Currency

Strike price

Strike of the put you are selling, and the price you would buy the shares at if assigned.

Premium per share

Premium received per share, as the chain quotes it.

Days to expiry

Calendar days. Used only to annualise the return on the cash.

Number of contracts

Shares per contract

Shares one contract covers — 100 on US equity options. Take it from your own contract specification.

Current price

Optional — the share price now. Adds the discount the effective purchase price represents and whether the put is already in the money.

Commission per contract

Your own broker's rate. Counted on the way in and on the way out of each leg.

Results

Return on the cash secured

2.49%

over 30 days · 30.26% annualised

Premium receivedUS$248.70 kept after US$1.30 of commission.: US$250.00
Cash securedThe strike across 100 shares. This is the capital the return is measured against.: US$10,000.00
Effective purchase price if assignedStrike less premium, per share. US$97.51 once commission is included.: US$97.50
Discount to the current priceHow far the effective purchase price sits below where the shares trade now.: US$6.50 · 6.25%
Where the strike sits nowThe shares trade above the strike, so at today's price the put expires worthless.: Out of the money
Annualised return on the cashThe period return scaled by 365 ÷ 30 days.: 30.26%
Maximum lossIf the shares are assigned and then fall to zero. Remote, but it is the true bound on a short put — the whole strike less the premium, not the premium.: US$9,751.30

What this means

Selling 1 put at a strike of US$100.00 brings in US$250.00 and sets aside US$10,000.00 for 30 days. Against that cash rather than against itself, the premium is 2.49% for the period, which scales to 30.26% a year at the same rate. If the put is assigned the shares are taken at the strike less the premium, US$97.50 a share, 6.25% below where the shares trade now. The cash is committed either way, which is why it is the denominator: measuring the premium against itself would report 100% on every trade.

The cash stays committed until the put expires or is bought back, whether or not the shares are ever assigned.
The annualised return is a simple annualisation — the period return multiplied by 365 ÷ days. It is not compounded, and it assumes the same return could be repeated for a whole year, which nothing guarantees.
American-style options can be assigned at any time before expiry, not only on the expiry date.
Commission is counted as a round trip on every leg — once to open and once to close. If you intend to let the option expire rather than buying it back, enter half your per-contract rate.

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About the Cash Secured Put calculation

The reason the position needs a selling puts calculator at all is the denominator. A premium of 1.35 a share tells you nothing on its own — the same figure collected against a 20 strike for a week and against a 200 strike for a year describe two completely different trades. Only the premium measured against the capital it immobilises, and then scaled to a common period, makes them comparable.

This calculator reports that put premium yield as a return on the cash secured, the annualised equivalent, the effective purchase price if the shares are assigned, how far that price sits below where the shares trade now, and the true maximum loss — which is the whole strike less the premium, not the premium.

Cash Secured Put formula

shares covered = contracts × shares per contract
cash secured   = strike × shares covered

premium     = premium per share × shares covered
commission  = rate per contract × contracts × 2
net premium = premium − commission

effective purchase price = strike − premium per share
return on cash           = net premium ÷ cash secured × 100
annualised return        = return on cash × 365 ÷ days to expiry

maximum loss = cash secured − net premium

cash secured: Strike × shares covered — the money set aside to buy the shares if the put is assigned.
effective purchase price: Strike less the premium: what the shares cost if they are assigned, having already collected the premium.
return on cash: Net premium as a percentage of the cash secured, for the option's life rather than for a year.
annualised return: The period return multiplied by 365 ÷ days — a simple scaling, not a compounded one.
round trip: Commission counted twice: once to open the position and once to close it.

The choice of denominator is the substance of this calculation. Dividing the premium by itself would report 100% on every put ever written, and dividing it by the margin a broker happens to demand would make the return a function of leverage rather than of the trade. The cash secured is what the position genuinely consumes: it cannot be spent elsewhere from the moment the put is sold until the moment it is closed, regardless of whether assignment ever arrives.

The effective purchase price falls out of the two outcomes the seller has already accepted. Above the strike the put expires worthless and the premium is the whole result. Below it the shares arrive at the strike, but the premium was banked weeks earlier, so the net outlay per share is the strike less that premium. A put written at 45 for 1.35 sets the shares at 43.65 in every assignment scenario, however far below 45 the price actually finishes.

Two effective prices are reported because the published formula and the true cost are not the same figure. Strike minus premium is the number every options desk quotes and the one that should be compared against the strike; adding the commission back gives what the shares would really have cost. Shown side by side without explanation the pair reads as a rounding discrepancy, which is why one sits in the hint under the other.

Annualising is a comparison device and nothing more. It multiplies the period return by 365 ÷ days so that a seven-day put and a ninety-day put can be read on one scale, but it assumes the same return is available in every subsequent period, and a premium seller can count on that in neither direction: implied volatility moves, a strike that paid well last month may pay very little next month, and one assignment interrupts the sequence entirely. It is deliberately not compounded, because compounding a figure that already overstates would compound the overstatement too.

The maximum loss looks alarming and is stated anyway. A short put's downside runs the whole distance from the strike to zero, less the premium collected, because the obligation to buy at the strike does not soften as the price falls. The scenario is remote for a broadly held share and it is not remote at all for a single company that fails, and a calculator that reported the premium as the risk would be describing a different instrument.

Cash Secured Put: a worked example

Two 45-strike puts sold 35 days out for 1.35 a share, with the shares at 47.20 and commission of 0.65 a contract.

Shares covered2 contracts × 100 = 200
Cash secured45 × 200 = 9,000
Premium received1.35 × 200 = 270.00
Commission, round trip0.65 × 2 × 2 = 2.60
Net premium270.00 − 2.60 = 267.40
Return on the cash267.40 ÷ 9,000 = 2.97%
Annualised2.9711% × 365 ÷ 35 = 30.98%
Effective purchase price45 − 1.35 = 43.65
Discount to the current price47.20 − 43.65 = 3.55, or 7.52%
Maximum loss9,000 − 267.40 = 8,732.60

270.00 collected against 9,000 of cash held for 35 days — 2.97% for the period, which scales to 30.98% a year at the same rate. If the put is assigned the shares cost 43.65 each, 7.52% below the 47.20 they trade at today, and the loss if they then fell to nothing would be 8,732.60.

How to use the Cash Secured Put calculator

Enter the strike of the put you are selling. It is both the price the shares would be assigned at and the basis of the cash requirement.
Enter the premium per share as the chain quotes it, not the total for the contract — the calculator multiplies by the contract size itself.
Enter the calendar days to expiry. This affects only the annualised figure; the period return is the same whatever is entered here.
Set the number of contracts and the shares each one covers. The multiplier defaults to 100 because that is the US equity convention, but it is an input — take it from your own contract specification.
Enter your own broker's commission per contract. It is counted as a round trip on the leg; if you intend to let the put expire rather than buying it back, enter half your per-contract rate.
Add the current share price if you want the discount and the in-the-money check. It is optional, and leaving it blank simply removes those two rows.
Read the return on the cash first and the annualised figure second. The first is what the trade actually earned; the second only exists so that different expiries can be lined up against each other.

Limitations of the Cash Secured Put calculator

Every calculation makes assumptions. These are the ones that matter here.

The cash requirement assumes the put is genuinely cash secured. A broker margining it under a portfolio or reg-T arrangement will demand far less, which raises the return on capital posted and raises the risk in exactly the same proportion.
Assignment is modelled as an outcome, not as a probability. Nothing here estimates how likely it is; that depends on volatility and the time remaining, and it belongs to the pricing and probability calculators rather than to this one.
American-style puts can be assigned at any point before expiry, so the cash may be converted into shares earlier than the days entered suggest, and the period the return was annualised over ends early with it.
Dividends are excluded. An approaching ex-dividend date raises the value of a put and makes early assignment more likely, and neither effect is captured by an arithmetic that never touches the pricing model.
Tax is excluded entirely. Premium and assignment are treated differently in different jurisdictions, and an assignment is a purchase at a time not of your choosing that may matter for later disposals.
The annualised return assumes the same premium is available in every subsequent period, which is the one assumption in the calculation that the market is under no obligation to honour.
Interest earned on the secured cash is not counted. On a large balance at a meaningful short-term rate that omission understates the position's true total return.

Frequently asked questions about Cash Secured Put

Why is the return measured against the cash rather than against the premium?

Because the cash is what the trade consumes. It is committed from the moment the put is sold until it is closed, whether or not assignment ever happens, so it is the capital that could not be used for anything else. Dividing the premium by itself would report 100% on every put written, which distinguishes nothing.

What happens if the put is assigned?

The shares are bought at the strike using the cash that was already set aside. Because the premium was collected when the put was sold, the net cost per share is the strike less that premium — 43.65 on a 45-strike put sold for 1.35 — and that figure holds no matter how far below the strike the price finishes.

Is the annualised cash secured put return something I can expect to earn over a year?

No. It is the period return multiplied by 365 ÷ days, which lets a two-week put and a three-month put be compared on one scale. It assumes an identical return is available in every remaining period of the year, and premiums move with implied volatility while a single assignment ends the sequence altogether.

What is the real maximum loss on a cash secured put?

The cash secured less the net premium — the whole distance from the strike to zero. It is the number reported here because a short put carries the full downside of owning the shares from the strike down, cushioned only by the premium. Remote for a broadly held company, entirely real for one that fails.

Why does the discount sometimes show as a premium instead?

Because a put deep enough in the money puts the effective purchase price above where the shares trade now. The premium no longer covers the gap to the current price, so the row turns around and names it a premium over the market rather than printing a negative discount, which would read as a fault rather than a finding.

Does this CSP calculator assume a particular broker's contract size or commission?

It does not. Shares per contract and commission per contract are ordinary inputs with generic defaults — 100 shares because that is the US equity options convention, and a plausible retail per-contract rate — and both should be replaced with the figures on your own contract specification and commission schedule.

Last reviewed 29 August 2026. See our methodology and editorial policy.

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