Cash-Secured Puts on Range-Bound Indexes

Selling cash-secured puts on broad indexes collects time-decay income on the whole market, with none of the overnight gap risk of a single earnings report or lawsuit.

You want steady premium income on the broad market without single-stock surprises.

Pillar 1 · Illustrative setup

How this example is built

Sell puts on a broad index product and hold the collateral. Broad indexes diversify away single-company headline risk.

Illustrative inputs only — not live prices.

Open the on-device calculator →

The on-device calculator covers vertical spreads; the figures above are the cash-secured-put formulas for this illustrative setup.

Pillar 2 · When & why

Why this fits Range-Bound Indexes

Because an index rarely gaps the way one stock can, the focus shifts to turning the collateral over efficiently and choosing strikes with room below the range. It's an income approach for a market you expect to chop sideways, not rocket.

An index can still fall in a broad sell-off, and a short put goes in-the-money with it. The diversification removes company-specific shocks, not market risk; your collateral is committed the whole time.

Pillar 3 · Risk / reward

The defined-risk math