Cash-Secured Put

A cash-secured put is an options strategy where you agree to buy shares of a stock at a set price (called the strike price) if the stock drops to that level by a certain date. You keep cash in your account equal to the full purchase cost, ready to deploy if needed. You're essentially saying, "I'll buy this stock at this price if you want me to." In return, you collect a small upfront payment called a premium. You'll encounter this when selling put options—it's popular with investors who want to own a stock anyway but earn extra income while waiting. For example, you might sell a put on TechCorp at $50 per share, collect $200 in premium, and either pocket that money or buy the shares if the price falls.