This calculator is designed for traders and investors to analyze potential outcomes of cash-secured put options. It helps assess the risk and reward of this strategy by calculating essential metrics.
Calculator
Results
Break-even Price
$0.00
Maximum Profit
$0.00
Maximum Loss
$0.00
Data Source and Methodology
All calculations are based on standard option pricing models and financial market data.
The Formula Explained
Break-even Price: Strike Price - Premium Received
Maximum Profit: Premium Received × Number of Contracts
Maximum Loss: (Strike Price - Premium Received) × Number of Contracts
Glossary of Terms
- Stock Price: The current price of the underlying stock.
- Strike Price: The price at which the put option can be exercised.
- Premium Received: The amount received for writing the option.
- Contracts: The number of option contracts involved in the trade.
Frequently Asked Questions (FAQ)
What is a cash-secured put?
A cash-secured put is an options strategy where an investor writes a put option and simultaneously sets aside the cash needed to purchase the stock if assigned.
How is the break-even price calculated?
The break-even price is calculated by subtracting the premium received from the strike price.