How Much Cash Does a Cash-Secured Put Need?
Reviewed by Leon Moyer - Published October 9, 2026 - Last reviewed October 9, 2026
In this lesson
Calculate the cash a cash-secured put requires and its return on that cash, size the number of contracts to an account, and explain why a margin-secured put carries the same worst case with far less cash.
A cash-secured put requires cash equal to the strike price x 100 for each contract you sell, because that is what you would pay for the shares if you are assigned: one 47 put needs $4,700.
The amount depends on the strike, not on where the stock trades today or on the premium you collect. This lesson works out the number, sizes a position to an account, and shows why a margin account changes how much cash you need but not how much you can lose.
How much cash do you need for a cash-secured put?
Cash required = strike price x 100 x number of contracts. Cboe's strategy-based margin table lists the cash-account requirement for a short equity put as a deposit of cash or cash equivalents equal to the aggregate exercise price, which is the strike times the number of shares.
Does the premium count toward the cash?
It depends on your broker. If the $80 premium counts toward the requirement, only $4,620 of your own cash is held; if it does not, the full $4,700 is held and the premium is free to use. Check how your broker reserves the cash. Either way, the money at risk is the same $4,620.
Worked example
Sizing cash-secured XYZ 47 puts in a $10,000 account
You have $10,000 of cash. XYZ trades at $50, and the 45-day XYZ 47 put pays $0.80 (a model value at 30% implied volatility, not a quote).
- Contracts the cash can secure: $10,000 / $4,700 = 2.1, so 2 contracts. A third would need $14,100.
- Cash set aside: 2 x $4,700 = $9,400, leaving $600 free.
- Premium collected: 2 x $80 = $160, the most the trade can earn.
- Worst case: XYZ goes to $0. You pay $9,400 for worthless shares and keep $160, a loss of $9,240, which is 92% of the account.
Fully secured is not the same as safely sized. Two contracts are affordable, but they put nearly the whole account into one stock if both are assigned. The Course 1 lesson Position Sizing - How Much to Risk on Each Options Trade explains how to cap what one trade can cost you.
Illustrative and hypothetical. The ticker and prices are invented for teaching, and the figures exclude commissions, fees, margin interest and taxes, which reduce real results. Past or hypothetical outcomes do not indicate future results.
What is the return on a cash-secured put?
Return on cash = premium / (strike x 100). On the 47 put that is $80 / $4,700 = 1.7% over 45 days.
What the premium earns on the cash
ONE CONTRACT
XYZ 47 Put, 45 days
Strike
$47
Cash set aside
$4,700
Premium
$80
Return on cash
1.7% max
$80 / ($47 x 100) = 1.7% in 45 days, if the put expires worthless
Read that number carefully. It is the maximum return, earned only if the put expires worthless or is bought back for nearly nothing. It is not a yield the account earns regardless of what the stock does.
Traders sometimes annualize it: 1.7% x 365 / 45 = about 13.8% a year. That figure assumes you could repeat the same trade eight times a year at the same premium with no assignments and no losses. One bad assignment can erase years of premiums, so treat an annualized return as a way to compare trades, not a forecast.
What is the difference between cash-secured and margin-secured puts?
In a margin account, you can sell the same put with far less cash. Under the exchange minimum in Cboe's strategy-based margin table, an uncovered equity put needs the premium plus 20% of the stock's value, less any amount the put is out of the money, with a floor of the premium plus 10% of the strike. For the 47 put with XYZ at $50:
- Basic: $80 + (20% x $5,000) - $300 out of the money = $780.
- Floor: $80 + (10% x $4,700) = $550.
- Requirement: the larger, $780. That is the exchange minimum; Cboe notes that brokerage firms can impose higher requirements, so your broker may ask for more.
Cash required versus money at risk, one XYZ 47 put
Cash required up front
Loss if XYZ goes to $0
A put sold on margin is an uncovered (naked) short put. The cash drops from $4,700 to $780, but the risk does not drop at all: if XYZ goes to $0, you still owe $4,700 for worthless shares and lose $4,620 per contract, the strike x 100 minus the premium. Margin requirements also rise as the stock falls, which can bring a margin call at the worst moment.
The real danger is using the freed cash to sell more puts. $4,700 meets the margin minimum on six of these puts (6 x $780 = $4,680), and six puts lose $27,720 if XYZ goes to $0. That is a leveraged bet, not a cash-secured put. FINRA Rule 4210 sets the industry margin rules, and the Course 1 lesson Cash vs Margin Accounts for Options Trading explains margin accounts in more detail.
Where does the cash sit while the put is open?
The cash stays in your account, but your broker marks it as reserved, so it does not show as available to spend or trade. Whether it earns interest while it waits, or can sit in a money market fund, depends on the broker. Ask before you count on it.
Check your understanding
How much cash secures four 25 puts?
Show answer
$10,000. Cash required is the strike times 100 times the number of contracts: $25 x 100 x 4.
A 60 put pays $1.20. What is its return on cash if it expires worthless?
Show answer
2%. The premium is $120 and the cash is $6,000, so $120 / $6,000 = 2%. That is the most the trade can earn.
Why is selling a put on margin riskier than a cash-secured put, if the worst case of one contract is the same?
Show answer
Because margin needs far less cash, it makes it easy to sell many more contracts than the account could pay for. Each contract carries the full worst case, and margin calls can force you to close at a loss.
Key takeaways
- Cash required = strike x 100 x contracts. One 47 put needs $4,700.
- Whether the premium counts toward the cash depends on the broker; the money at risk is the same either way.
- Return on cash = premium / (strike x 100). It is the most you can earn, not an expected yield.
- A margin account needs much less cash for the same put, but not less risk: one 47 put still loses $4,620 if the stock goes to zero.
Common questions
How much money do you need to sell a cash-secured put?
Cash equal to the strike price times 100 for each contract. Selling one 47 put needs $4,700; selling three needs $14,100. Some brokers let the premium you receive count toward that amount, others hold the full figure.
Can you sell cash-secured puts in a cash account?
Often, yes. Exchange rules allow a short put in a cash account when cash equal to the full exercise price is deposited, and many brokers offer cash-secured puts in cash accounts with options approval. Each broker decides which strategies it allows.
Can you sell cash-secured puts in an IRA?
Many brokers allow it, because the put is fully paid for by cash already in the account and no borrowing is involved. Approval levels and rules for retirement accounts vary, so check with your broker.
Do you earn interest on cash-secured put collateral?
It depends on the broker and on where the cash sits. Some pay interest on cash balances or let the reserve stay in a sweep or money market fund; others pay little. Ask your broker how set-aside cash is treated.