writing cash-secured puts

Definition

An options strategy that allows a trader to avoid using a margin account to sell put options by avoiding margin calls, and instead the trader deposits cash that is equal to the option exercise price. This act prevents the trader from having to borrow funds to cover the exercise price.

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Popular 'Options' Terms

security
derivative
risk
option
securities

intrinsic value
hedge
put option
warrant
purchase

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Tools

writing cash-secured puts is ...

... part of the Options subject.

Nearby Terms

write down
write out
write up
write-off
writer
writing cash-secured puts
writing naked
writing puts to acquire stock
written-down value
WST
wt