How much cash a cash-secured put really ties up
A cash-secured put ties up the strike times 100 per contract, in cash, for the whole life of the trade. A $25 strike locks $2,500. That is the number the premium has to be measured against, and it is the reason a big credit on a $400 stock can be a worse trade than a small one on a $25 stock.
The premium is the number people quote. The capital is the number that decides whether the trade was any good.
The arithmetic, which is not complicated
Strike x 100 x contracts. That is it.
- One PFE $25 put: $2,500 locked, $55 collected, 49 days.
- One AAPL $210 put: $21,000 locked.
- One NVDA $170 put: $17,000 locked.
- Five PFE $25 puts: $12,500 locked, five times the premium, five times the assignment.
Brokers differ on what counts. Some hold exactly strike x 100. Some hold strike x 100 minus the premium you received, since that cash is already yours. The difference is small and it is worth knowing which one yours does, because it changes how many contracts you can carry.
What locked actually means
It means unavailable. You cannot buy shares with it, you cannot sell another put against it, and you cannot withdraw it. In most brokerage accounts it still earns the sweep rate, which at a 4 percent sweep on $2,500 over 49 days is about $13. Real money, worth counting, and nowhere near the $55.
What it does not mean is escrowed at the OCC or held anywhere special. It is a hold your broker places on your own cash so that they know you can pay for the shares. That is the whole mechanism.
The comparison that changes decisions
Two trades, both 49 days out, both roughly 0.20 delta.
- PFE $25 put for $0.55. $55 on $2,500. That is 2.2 percent over 49 days.
- AAPL $210 put for $2.85. $285 on $21,000. That is 1.36 percent over 49 days.
The AAPL trade pays five times more dollars and is the worse trade on a return basis by a wide margin, and this is the single most common mistake in put selling. Big premium, big capital, mediocre yield. The dollar figure on the chain tells you almost nothing on its own.
It also concentrates you. That AAPL put is eight and a half PFE puts worth of capital riding on one company's next earnings print.
The capital cost people forget: you cannot redeploy
Forty-nine days is a long time to have $2,500 committed to a stock you do not yet own. If the market drops 12 percent in week two and the thing you actually want to buy goes on sale, that cash is spoken for. You are not liquid. You are on the hook.
This is the real argument for shorter-dated puts, and it is a better argument than the theta-decay one. Twenty-one days out you are committed for three weeks. Sixty days out you have signed away two months of optionality on your own account for a premium that is not twice as large.
What a small account can actually run
With $10,000 in cash you can secure four PFE $25 puts, or two $50-strike puts, or zero AAPL puts. That is the honest capacity of a small account doing this properly, and it is why cash-secured puts on cheap stocks are where most people start, whatever the forums say about ticker quality.
The alternative is selling the put on margin instead of cash, which cuts the requirement to a few hundred dollars per contract and changes the risk profile completely. That trade has its own page, with the Cboe formula worked out on this exact PFE position, because the number surprises people in both directions.
The position size calculator will tell you how many contracts your account carries at a given strike before you find out from a margin call.
Questions people actually ask
How much cash do I need for a cash-secured put?
The strike times 100 per contract. A $25 strike needs $2,500. Some brokers reduce the hold by the premium you received, so $2,445 on that trade.
Does the cash earn interest while it is held?
In most brokerage accounts, yes, at the sweep or money-market rate. At 4 percent on $2,500 over 49 days that is roughly $13, which is worth counting and is not a reason to do the trade.
Is a bigger premium a better trade?
Not by itself. A $285 credit on $21,000 of secured capital is 1.36 percent, while a $55 credit on $2,500 is 2.2 percent. Return on capital per day is the comparison that means something.
Can I use margin instead of cash?
Yes, and then it is not a cash-secured put. It is a naked put with a much smaller requirement, a maintenance number that rises as the stock falls, and the possibility of a margin call before expiry.
Sources
Rules and thresholds above were checked against these documents on August 6, 2026. Exchange and broker rules change. Confirm anything you are about to act on with your own broker.
Keep reading
Do the math on your own trade
Every price in this article is an illustrative worked example, not a quote. Read Cash-secured puts for the rest of the series, and the disclaimer before you act on any of it. Selling options carries real risk of loss, and the loss can be far larger than the premium you collected.