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How much cash should you keep aside for assignment?

Keep the full strike times 100 for every open put, written as its own line, and don't spend it. A margin account may show that cash as free. It isn't, and assignment day is when you find out.

Options guide · 8-minute read · Updated 2026-10-27

The short answer

For every open put, keep the strike × 100 in cash, untouched. One $45 put means $4,500 set aside. Three puts at $45 mean $13,500.

Write that number down as its own line, separate from your "cash available." In a cash account or most IRAs, the broker locks it for you. In a margin account, the broker may lock only part of it, and the rest looks free to spend. If you spend it and get assigned, you'll be borrowing to buy the shares.

Why the broker's number can mislead you

When you sell a cash-secured put in a cash account, the broker usually holds back the full strike × 100. You can't spend it by accident.

In a margin account, the broker holds back a margin requirement instead. That's often a fraction of the strike. Your screen then shows more buying power than you'd have after an assignment. Our page on cash account vs margin account for selling options explains the difference.

The obligation hasn't changed. If the put is assigned, you buy 100 shares at the strike, full price. Whatever cash isn't there gets borrowed, with interest.

A worked example where the cash gets spent (an illustration, not a trade idea)

You have $10,000 in a margin account. A made-up stock, XYZ, trades at $50.

You sell one 30-day $45 put for $1.00 and collect $100. The broker holds back about $1,000 (made up; yours may differ). Your screen shows about $9,100 still available.

A week later, another stock, ABC, looks like a bargain. You buy $7,000 of ABC shares. The screen still says you have room.

Then the market has a bad month. At expiry, XYZ is at $38 and ABC has fallen to $6,000. Your put is assigned. You owe $4,500 for XYZ shares, but you only have $3,100 in cash ($10,000 + $100 − $7,000).

The broker lends you the other $1,400 on margin. You pay interest on it every day it's open.

Now say both keep falling. XYZ drops to $30 and ABC to $5,000.

The second column isn't just a bigger loss. It's a loss of control. With borrowed money, the broker can issue a margin call and close positions at prices you didn't choose.

The separate line

The fix is boring and it works. Keep a short block in your journal or spreadsheet, updated after every trade:

Only the "cash free" line is spendable. The broker's buying power number is not your number.

When a put is closed or expires, the promised cash moves back to "free." When a put is assigned, the promised cash becomes shares. Either way, the line stays honest.

Our wheel strategy tracking spreadsheet has a layout you can copy.

The mistakes that spend it

• Treating buying power as cash. In a margin account, they're different numbers.
• Selling a new put before the last one is gone. Two puts on the same cash is a promise you can't keep in cash.
• "I'll close it before expiry." You might not get the chance. A stock can gap through your strike overnight, and US options can be assigned early.
• Spending the premium as if the trade were over. Until the put is gone, the premium is part of what backs it.
• Forgetting the call side. A covered call doesn't need cash, but it does need the shares. Selling the shares while the call is open leaves you with a naked call, which most cash-secured accounts won't allow.

If you'd like to free the cash sooner, the honest way is to close the put. See closing options before expiration.

How much cash on top of that?

The set-aside cash covers assignment. Many sellers also keep a buffer of free cash that never backs a trade. It pays fees, covers a bad month, and means you're never forced to sell something to raise cash. How big it should be depends on your account. See how much money you need for the wheel and position sizing for selling options.

A note on accounts. US IRAs usually require the full strike to be held for a put, which does this for you. In Canada, covered calls are widely allowed in a TFSA or RRSP, while cash-secured puts depend on the broker, and those accounts generally can't borrow. Options permissions differ by broker.

The rule for next time

Before you spend any cash, read the "cash free" line, not the broker's buying power. If a trade would push that line below zero, it's a trade made with money you've already promised. For the wheel strategy, that promise comes due on the worst day, when the stock has fallen and everything else has too.

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