A cash-secured put is an options strategy where you sell a put option and hold enough cash in your account to purchase the underlying shares if assigned. In exchange for this obligation you receive premium upfront. If the stock stays above the strike price at expiration, you keep the premium as income.

The maximum profit is the premium collected: Premium Per Share × Contracts × 100. This is achieved when the stock closes at or above the strike price at expiration and the put expires worthless.

If the stock closes below the strike price at expiration, you may be assigned 100 shares per contract at the strike price. Your effective cost basis is Strike − Premium, since you already collected the premium. This is the first step in the wheel strategy — you then sell covered calls on the assigned shares.

Breakeven = Strike Price − Premium Per Share. Below this price at expiration your position shows a net loss. Above it, you profit (up to the maximum of the premium collected).

Most experienced wheel traders target 1–3% monthly ROI (12–36% annualized). Higher ROI often means higher risk (lower strike relative to stock price, or high implied volatility underlying). Balance premium income with assignment risk.

A cash-secured put sells the right to buy shares — you collect premium and potentially get assigned stock below the strike. A covered call sells the right to buy shares you already own — you collect premium and potentially have shares called away above the strike. Together they form the wheel strategy.

Both strategies involve selling a put option, but a cash-secured put requires you to hold enough cash in your account to cover the full purchase price of 100 shares at the strike. A naked put has no such cash reserve requirement — it relies on margin instead. Cash-secured puts are allowed in most IRA accounts and carry no margin call risk, making them far safer for income-focused retail traders.

Yes. Rolling means buying back your current put (at a loss or small gain) and selling a new put with a later expiration and/or a lower strike, collecting net premium in the process. Rolling gives the stock more time to recover above your strike. It is most effective when you still want to own the underlying and the new premium meaningfully reduces your cost basis. Avoid rolling indefinitely on stocks with deteriorating fundamentals.