Cash-Secured Put

A cash-secured put is an options strategy where you agree to buy 100 shares of a stock at a set price (called the strike price) by a future date, in exchange for receiving an upfront payment (the premium). You keep enough cash in your account to cover the purchase if the stock price drops and the buyer exercises their right to sell you those shares. Think of it like saying, "I'll buy your shares at $50 each if you want to sell them to me." You pocket the premium whether or not the stock gets sold to you. It's popular with investors who want to own a stock anyway but earn extra income while waiting, or who want to buy at a discount. The main risk: you might be forced to buy shares when you'd rather not.