How much cash do I need to sell a cash-secured put?

How this is calculated

• This applies to a standard cash-secured put: selling one put contract while setting aside enough cash to buy 100 shares per contract at the strike price if assigned. One standard equity option contract represents 100 shares.
• Cash required equals the strike price multiplied by 100, multiplied by the number of contracts. Most brokers hold this amount as cash or cash equivalents for as long as the position is open.
• Total premium collected equals the premium received per share multiplied by 100, multiplied by the number of contracts. This is yours to keep whether or not the option is later assigned.
• Net cost basis if assigned equals the strike price minus the premium received per share. This is the effective price you'd pay per share if the stock is put to you at expiration.
• Max return if the put expires worthless equals total premium collected divided by cash required, shown as a percentage. This is the best-case outcome and assumes the stock closes above the strike at expiration.
• Annualized return, shown only if you enter days to expiration, scales the max return to a 365-day basis so you can compare cash-secured puts with different expiration dates on equal footing.
• This does not include commissions, per-contract fees, margin requirements that differ from full cash collateral, early assignment, or the risk that the stock falls well below your cost basis after assignment.