Cash-secured put calculator

What one contract pays, what it ties up, and what that is worth annualized.

How each figure is worked out

• Premium is the credit per share × 100, because one contract covers 100 shares. Options are quoted per share and sold per contract, and conflating the two is the most common way a return figure comes out a hundred times wrong.
• Capital required is (strike − credit) × 100. The credit arrives when you open the trade and is part of the cash that would buy the shares, so it reduces what has to be set aside — on a $50 strike with an $0.85 credit, dividing by $4,915 rather than $5,000. A small difference, and it is the denominator of every other figure here.
• Breakeven is strike − credit, per share. Below that, assignment costs money.
• Return is premium ÷ capital, over the holding period.
• Annualized multiplies that by 365 ÷ days. Simple, not compounded — which is what an options desk quotes, and the honest choice: a 45-day trade repeated eight times is not a compounded year, and treating it as one flatters short-dated trades.
• Breakeven buffer is the credit as a fraction of the strike: how far below the strike the stock can settle before assignment costs you money. It is not the same thing as the distance from today’s price to the strike, which is the larger number our research pages call the cushion.