Options

Cash-Secured Put

Selling a Put option while setting aside enough cash to fully cover the potential obligation of buying the underlying at the strike price if assigned.

A cash-secured put means selling a Put option while setting aside enough cash to fully cover the potential obligation — buying the underlying at the strike price — if assigned, rather than relying purely on margin. It’s a more conservative approach used by traders genuinely willing (and prepared) to take stock delivery if assigned.

See how this compares to margin-based Put selling in How to Sell (Write) a Put Option: Risks and Rewards.