Cash-Secured Put Yield Calculator
Selling a cash-secured put? See the yield on the cash you set aside, the annualized return, and your effective buy price if assigned.
How it works
Cash secured = strike × 100 × contracts · Yield = premium ÷ strike · Annualized = yield × 365 ÷ days · Effective buy = strike − premium
A cash-secured put means you sell a put and hold enough cash to buy the shares if assigned. Your yield is the premium measured against that reserved cash, and annualizing it lets you compare short-dated puts on a common basis. The trade has two acceptable outcomes: the put expires worthless and you keep the premium as pure yield, or you are assigned and buy the stock at a discount equal to the premium — an effective entry price of strike minus premium.
Worked example
Selling one $45 put for $1.20 sets aside $4,500 in cash. The premium is $120, a yield of 1.20 ÷ 45 = 2.67% over 30 days, which annualizes to 2.67% × 365 ÷ 30 ≈ 32.4%. If assigned, your effective purchase price is $45 − $1.20 = $43.80.
Frequently asked questions
Why measure yield against the strike?
Because a cash-secured put requires you to reserve strike × 100 per contract in case of assignment. That reserved cash is the true capital at work, so the premium divided by it is the honest yield on the position.
Is the annualized yield realistic?
It assumes you could keep repeating similar trades all year, which markets rarely allow. It is a comparison tool, not a promise — the actual outcome depends on whether you are assigned and where the stock trades.
What is the effective buy price?
If assigned, you pay the strike but keep the premium, so your net cost is strike minus premium per share. That is the discount to the current price you are effectively locking in by selling the put.
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Educational estimate, not investment advice. Options and margin involve substantial risk.