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What's the cheapest way to start selling options?

The cheapest real-money start is a covered call on 100 shares of a low-priced stock you'd hold anyway, or a cash-secured put with a low strike. Cheapest to start isn't the same as cheapest risk, so here's both, with the losing cases.

Options guide · 8-minute read · Updated 2026-10-26

The short answer

The cheapest way to start selling options with real money is one of two trades:

1. A Covered call on 100 shares of a low-priced stock you'd keep anyway. If you already own 100 shares of something, this needs no new cash at all.
2. A cash-secured put with a low strike. A $7 strike needs $700 set aside.

Before either, the truly cheapest start is paper trading, which costs nothing. Both real trades are the two halves of the wheel strategy, so whichever you start with, you're learning the whole loop.

What each route costs to start

Brokers name their approval levels differently. See options approval levels explained.

Both trades side by side (an illustration, not a trade idea)

A made-up stock, XYZ, trades at $8. You'd be fine owning it.

• Route A, covered call. You buy 100 shares for $800. You sell one 30-day call at the $9 strike for $0.15, collecting $15.
• Route B, cash-secured put. You sell one 30-day put at the $7 strike for $0.15, collecting $15. Your broker sets aside $700.

Here's every outcome at expiry:

Notice how small the premium is. On a stock this cheap, $15 doesn't cushion much. It's a learning trade, not a payoff.

Why cheapest isn't the same as least risky

A cheap trade has a small dollar size. That's the good part. But cheap stocks bring their own problems.

• They often move more. Many stocks under $10 belong to smaller or weaker companies. A 30% drop is more common.
• Spreads are wide. If a call's bid is $0.10 and the ask is $0.20, selling at the bid gives up a third of the price. Use a limit order near the middle.
• Fees take a bigger share. A typical per-contract fee might be a few percent of a $15 premium. Some brokers charge nothing; some charge for assignment. See options trading fees for sellers.
• Fewer strikes and dates. Some cheap stocks only have monthly options, a few strikes, and low Open interest.

So the real test isn't "what's the cheapest stock?" It's "what's the cheapest stock I'd honestly be glad to own if it fell 30%?"

If you already own 100 shares

This is often the best cheap start. You already carry the stock's risk. A covered call adds no new downside. It adds a premium and a cap on your upside.

The questions to ask first:

1. Would you be happy selling the shares at the call's strike? If not, don't sell the call.
2. Is the strike at or above what you paid? Selling below locks in a loss if you're called away.
3. Is there an earnings report or an Ex-dividend date inside the trade?

Our covered call strategy guide walks through every outcome on a stock you own.

A first-trade plan that costs little

1. Paper trade one full cycle. Pick a stock, write down a put or a call as if you'd sold it, and track it to expiry. See wheel strategy paper trading.
2. Check your approval. Ask your broker which level covers covered calls and cash-secured puts in your account type.
3. Pick one stock you'd keep. Low-priced, but a real business with active options.
4. Size one contract. Strike × 100 should be money you won't need soon. See can you wheel with a small account.
5. Use a limit order near the middle of the bid and ask.
6. Write the exit before you place the trade: the price where you'd sell the shares if it keeps falling.

A note on accounts. In the US, many brokers allow covered calls in an IRA or cash account, and some allow cash-secured puts. In Canada, covered calls are widely allowed in a TFSA or RRSP, while cash-secured puts depend on the broker. Options permissions differ by broker. For the $1,000 version of this, see the wheel with $1,000.

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