Cash Secured Put Profit Explained

The Cash Secured Put (CSP)

A cash-secured put involves selling a put option while keeping enough cash in your account to buy the shares if assigned. Traders use this to generate income or to "buy stocks at a discount."

P&L Outcomes

• Stock stays above strike: The put expires worthless, and you keep the full premium as profit.
• Stock falls below strike: You are assigned the stock at the strike price, but your effective entry is (Strike - Premium Received).

FAQ: Cash Secured Puts

What is assignment?

Assignment is when the option buyer exercises their right. As the seller, you are obligated to buy the 100 shares at the strike price.

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