Option assignment cash calculator: the cash a short put needs
Selling a put is a promise to buy shares. Enter the strike and contracts to see the cash that promise needs.
How it works: if a put you sold is assigned, you buy the shares at the strike. Cash needed = strike × shares per contract × contracts. The premium you already got was paid to you earlier, so it lowers the cost per share, not the cash the buy needs on that day. Cash left = cash in the account − cash needed. A negative number is a shortfall.
Cash you have versus cash you need
One contract is usually 100 shares. A $50 strike means $5,000 per contract. Two contracts need $10,000. If the account holds $8,000, it is $2,000 short. Your broker decides what happens next, and it can differ by account type. Check yours before you sell the put.
The premium does not close the gap on the day of the buy. It only brings the price per share down. Read options assignment, explained and assignment risk.
The usual mix-up
People see "$250 collected" and forget "$10,000 owed if assigned". The first is the small number. The second is the size of the bet. See the cash-secured put, explained for the version where the cash is set aside first.
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