What Is a Cash-Secured Put, and How Does an Alert for One Work?

Published Oct 26, 2026

A cash-secured put is a put option you sell while keeping enough cash to buy the shares if you have to. The cash "secures" the put: if the buyer exercises it, the money to pay for the shares is already set aside.

This article explains how the position works, what it commits you to, and which of its conditions an alert can check for you. It describes a strategy; it does not say whether the strategy suits you.

The pieces

A put option gives its buyer the right, but not the obligation, to sell shares at a fixed price, the strike, until the option's expiration date. The buyer pays the seller a premium for that right.

When you sell a put:

• you receive the premium when the sale goes through, and keep it whatever happens next;
• you take on the obligation to buy the shares at the strike if the put is exercised;
• you keep cash equal to the strike times the contract multiplier available for as long as the put is open.

What can happen at expiration

• The stock stays above the strike. The put is usually left to expire. You keep the premium, and the cash is free again.
• The stock falls below the strike. The put is likely to be exercised and you are assigned: you buy the shares at the strike. Your effective cost is the strike less the premium you received.
• The stock falls far below the strike. You still buy at the strike, so the shares are worth less than you paid for them. The premium offsets only part of the difference.

Assignment can also come before expiration, because U.S.-listed stock options can generally be exercised early.

The trade-offs

1. The return is limited to the premium, however far the stock rises.
2. The obligation to buy stays, however far the stock falls, until the put expires or is closed.
3. The cash is committed while the put is open, and cannot be used for anything else without changing the position.

Some investors use cash-secured puts as a way to buy a stock they already want, at a price below today's, while being paid to wait. Whether that is a reasonable plan for a given stock depends on research no alert can do.

Measuring the premium

For a put, the capital is the cash the put secures. OpScout works out the return itself, at the bid:

• capital is the strike less the bid;
• the interval return is the bid divided by that capital;
• the annualized return is the interval return times 365, divided by the days to expiration, counted to 4:00 p.m. Eastern Time on the expiration date.

The figure is simple, not compounded, and leaves out commissions, fees, taxes and the interest the cash might earn elsewhere. Annualized return, explained.

Where an alert fits

A Cash-Secured Put Monitor in OpScout screens the puts on a stock you choose against your rules:

• a strike rule: a minimum out-of-the-money distance below the stock, a preset range, or a strike you enter (only puts that are out of the money are considered);
• an expiration rule: a range of days to expiration, inclusive at both ends, or the exact dates you pick;
• a minimum annualized return, at the bid;
• optionally, an implied volatility range, a maximum in-the-money probability, and a price or market cap range for the stock.

OpScout checks the Monitor about every 15 minutes during the U.S. regular trading session, reads each returned contract's bid and ask, and alerts you when a put meets every condition. When several match, the Alert names the first by a published ordering and counts the rest; that order is not a recommendation.

OpScout does not check or hold your cash, does not connect to your brokerage account and does not place trades.

A put with a target price

If what you have in mind is a price you would be willing to pay for the stock, a Target Entry Monitor may be closer to it. You give a target entry price and a minimum annualized return, and it looks for a way to own the stock at or below that price while earning at least that return: by selling a put, where the entry is the strike less the bid, or by a buy-write, where the entry is the stock's ask less a call's bid. Target Entry Monitors.

In short

• A cash-secured put is a sold put with the cash to buy the shares kept aside.
• It pays a premium now, in exchange for the obligation to buy at the strike.
• An alert can watch for puts that meet your strike, expiration and return conditions, during the trading session.

Set up Cash-Secured Put alerts · Glossary