The setup (updated 15 July 2025) – Apple now trades around $210 per share. You’d love to own it at $180. Instead of waiting and earning nothing, you sell a cash-secured put at the $180 strike and collect roughly $4 per share in premium. If Apple dips to $180, you’re assigned and buy 100 shares at your target price. If it doesn’t, you keep the $400 and can try again next month.
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That’s the beauty of cash-secured puts—you get paid to wait.

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What Exactly Are Cash-Secured Puts?

A cash-secured put (CSP) is an options strategy in which you:
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1. Sell a put option on a stock you’d like to own.
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2. Set aside enough cash to buy 100 shares at the strike price.
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3. Collect premium up-front for taking on the obligation to buy.
   
   

It’s like getting paid to place a standing limit order below the market.

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Step-by-Step Implementation

1 – Choose Your Target Stock

Stick with blue-chips you’d happily hold for years. Liquid options and solid fundamentals are must-haves.

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2 – Determine Entry Price

Pick a level you’re comfortable owning 100 shares. Use valuation metrics, technical support or dollar-cost-average plans.

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3 – Select Strike & Expiration
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• Strike: At or below your entry level.
  
  
• Expiration: 30-45 days captures healthy time-decay without tying up cash too long.
  
  
• Delta guide: 0.20-0.30 = balanced premium vs. assignment odds. Higher delta offers more income but greater chance of assignment.
  
  

4 – Execute and Monitor

Confirm cash available (strike × 100), sell the put, collect premium, and manage as the stock moves.

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Advanced Techniques
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• Rolling – Buy back an in-the-money put and sell a later-dated strike, often for a net credit.
  
  
• Earnings play – Sell puts just before earnings when implied volatility is higher, aiming to profit from the post-report volatility crush.
  
  
• Dividend timing – Structure expirations so that, if assigned, you’ll capture the next dividend.
  
  
• Wheel strategy – Keep selling CSPs until assignment, then switch to covered calls on the shares until called away, and repeat.
  
  

Because these are advanced techniques, be prepared to invest time mastering the exact mechanics of each before you put them into practice.

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Tax Pointers (U.S.)

• Premium isn’t taxed until the position closes.
  
  
• If assigned, premium lowers your stock basis.
  
  
• Unassigned profits are short-term gains.
  
  
• Hold assigned shares ≥ 1 year for long-term capital-gain treatment on appreciation.
  
  

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Common Mistakes

1. Selling puts on names you’d never own.
   
   
2. Chasing sky-high premiums that signal extreme risk.
   
   
3. Overcommitting cash, starving other opportunities.
   
   
4. Ignoring earnings / FDA / macro events.
   
   
5. Panicking during volatility spikes; follow your plan.
   
   

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Finding the Best Setups

There's a lot that goes into setting up a cash secured put and then managing your position effectively. While tools like TradingView and Seeking Alpha can help you with various parts of the process, LevelFields AI is, in our opinion, the best tool for the comprehensive approach that combines everything you need to set up and manage CSP positions successfully.
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LevelFields AI provides the complete package for cash secured put traders. The platform tracks various events like earnings beats, share buybacks, and dividend increases that can significantly impact option premiums and create ideal CSP opportunities. Rather than manually monitoring dozens of stocks for the right setup conditions, LevelFields identifies when companies experience the catalysts that typically drive the volatility and price movements that make CSP strategies most profitable.

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The platform's backtested data shows you historically how stocks react to specific events, helping you time your CSP entries when you're most likely to either keep the premium or acquire shares at attractive prices. This systematic approach beats trying to guess when stocks might pull back to your target strike prices.

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Building a CSP Portfolio
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• Diversify across 4-6 sectors; avoid clustering in correlated names.
  
  
• Capital mix: keep 20-30 % cash uncommitted for new trades or assignments.
  
  
• Stagger expirations so not all cash frees or ties up at once.
  
  
• Track metrics: annualized return on cash, assignment rate, win rate, average days-in-trade.
  
  

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Psychology & Big-Picture Fit

Patience is vital—great CSPs come after sell-offs or volatility spikes. View assignment as success, not failure: you’re now long a quality stock at a discount and can pivot to covered calls.
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Limit total CSP exposure to 10-20 % of your overall portfolio so the strategy supplements—rather than dominates—your asset mix.

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Cash-secured puts let you earn steady option income and acquire beloved stocks at bargain prices. By focusing on high-quality companies, selecting rational strikes, and practicing disciplined risk management, you transform idle cash into an active, yield-generating component of your long-term investing plan.
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Get paid to wait, or get paid and own the stock—either outcome can build wealth over time.