Cash-Secured Puts — Getting Paid to Buy

Overview

A cash-secured put obligates you to buy shares at the strike price if assigned — you collect premium while you wait. It's like setting a limit buy order and getting paid for it. Use the position size calculator to ensure you have enough capital reserved for assignment. When your put is eventually assigned, transition into a covered call to run the full Wheel strategy and keep generating income.

Key Takeaways

• Sell puts at strikes where you'd happily buy the stock. If assigned, your effective cost basis = strike − premium received.
• Max profit: the premium collected (stock stays above strike). Max loss: assigned at strike and stock goes to $0.
• Best when: IV is elevated, you're bullish on the stock, and you have cash to cover assignment.
• If never assigned, you keep the premium — repeat monthly for consistent income.

Practical Tips

• Target 0.20-0.30 delta puts (70-80% chance of expiring OTM) for a good risk/reward balance.
• 30-45 DTE captures the fastest theta decay while giving time for position management.
• The 'Wheel' strategy: sell puts until assigned → sell covered calls until called away → repeat.