Quick definition
A strategy that sells a put option while holding enough cash to buy the shares if assigned. The cash-secured put earns premium up front and either keeps the premium or acquires stock at an effective discount.
Why traders use it
The cash-secured put is a way to get paid for waiting to buy a stock you were going to buy anyway. It provides a defined-outcome entry: either premium income or share acquisition at an effective discount. It also enforces discipline — the trader commits to a specific price, at a specific size, before entering, rather than chasing dips emotionally.
Risk profile
The risk is the same as owning the stock outright from the strike minus premium collected — if the underlying craters, the assigned position takes losses just like any long stock position. Cash-secured puts do not create leverage; they simply front-load part of the return as options premium. Selling puts against stocks you would not want to own is the fastest way to turn this strategy into a disaster.
How Treeova uses it
Treeova's cash-secured put agents run the strategy end-to-end: strike selection based on delta and IV Rank, position sizing that respects buying power, and post-assignment handoff into a covered-call or holding-period rule. The wheel strategy — cash-secured put → assignment → covered call → assignment out — is a first-class agent archetype in the Trading Workspace.