Cash-Secured Put

Description

Selling an OTM Put option while maintaining enough cash to buy the stock.

Trading Logic

Ideal "buy on dip" strategy. If the stock stays above strike, keep the premium.

Practical Example

TSLA is $200. Sell a $180 Put for $8 premium.

P/L Curve

Chart Description
  • X-Axis: Stock price at expiration
  • Y-Axis: Expected P/L ($)
  • Green area: Profit; Red area: Loss