cash-secured put

cash-secured put

A put for which the writer deposits an amount of cash equal to the option's exercise price. For example, the writer of a put option on 100 shares of Sears stock at $35 per share would deposit $3,500 because the writer has agreed to buy $3,500 of Sears common stock if the put is exercised. The funds for a cash-secured put may be placed in short-term income-earning securities such as Treasury bills.