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Cash-secured put

Get paid to maybe buy 100 shares at a lower effective price. STO (sell to open) the put. BTC (buy to close) to skip assignment.

You STO (sell to open) a put and park enough cash to buy 100 at the strike. You are paid to wait for a name you would accept owning. Assigned: effective buy ≈ strike − premium.

Stock $100. Sell a $95 put for $3. Stay above $95: keep $300. Assigned: buy at $95, basis ≈ $92. A crash still hurts — this is not a debit spread.

The lab is that short put. Parked cash does not show as a Greek. Slide the stock down and watch delta go more negative.

cash-secured-putSet cash aside, sell a put, keep the credit or buy 100 shares at the strike.Cash-secured put — three stepsTeaching sketch1Set cash asideStrike × 100. Ready to buy.2STO a putCollect premium. You sold the right.3Expire or assignKeep cash, or own 100 at K.You sold the put kinkStock $100 · sell $95 put for $3 · cash $9,500K $95keep $300crash → you buy (or mark hurts)Not a debit spread. Basis if assigned ≈ $92.
You are paid to wait for a stock you would accept. Keep the credit if it stays above K. Assigned: buy at K, basis ≈ K minus premium.

Teaching lab

Short put — cash is not a Greek

Stock $100. STO a $95 put for $3. You want the stock up. A crash still hurts.

P/L / share
+2.11
×100
+211
Delta
+0.211
Gamma
-0.0403
Theta / day
+0.0318
Vega / vol pt
-0.0828

P/L / share

vs the lesson entry

3.00-31.65$60$80$100$120$140

Delta

share-equivalent

1.000.00$60$80$100$120$140

Gamma

peaks near the strikes

0.000-0.059$60$80$100$120$140

Theta / day

clock

0.0390.000-0.012$60$80$100$120$140

Vega / vol pt

fear priced in

0.000-0.108$60$80$100$120$140

Rho / rate pt

small at 30 days

0.0780.000$60$80$100$120$140

Parked cash does not change delta. This is not a debit spread. Teaching only.

Try it: Practice train (classroom put only)

Tickets for this structure

BTO (buy to open) · STO (sell to open) · BTC (buy to close) · STC (sell to close). Illustrative fills only. We never send these orders.

STO (sell to open)

Open a short

Sell to open

NVDA $120. STO (sell to open) 1× 45-DTE (days to expiration) $110 put at $2.80 ($280). Cash $11,000. Stay above $110: keep $280.

BTC (buy to close)

Close a short

Buy to close

Put later $4.50. BTC (buy to close) at $4.50. P/L (profit and loss) = −$170. Flat; not assigned.

BTO (buy to open)

Open a long

Buy to open

BTO (buy to open) the $110 put is a long put. A CSP (cash-secured put) opens with STO (sell to open).

STC (sell to close)

Close a long

Sell to close

You are short, so exit is BTC (buy to close) — or assignment at $110 (basis ≈ $107.20).

When the desk says close

A management note that says “close” on an open CSP (cash-secured put) means BTC (buy to close) the short put at the delayed mark — not STC (sell to close), and not “sell the shares” unless you were already assigned.

If you are assigned and then sell a call against the shares, that sequence is the wheel — see the Wheel lesson. The CSP (cash-secured put) is only the first lap.

How the Greeks move

Short put: negative delta, you collect theta, short vega. Slide days down near $95: gamma and theta jump. A crash is still yours — the lab will not cap it the way a debit spread does.

Checking for a quiz…

Teaching numbers only — not a live quote, not a fill, not financial advice. All lessons · Back to Practice · Replay · Journal.