Part 6 Learn Institutional Trading

Cash-Secured Put – Best for Buying Stocks at Lower Price

This is the safest way to use options when you want to accumulate stocks at a discount.

How it works

You set aside cash.

You sell a put option at a lower strike price.

If the stock falls below strike, you get the shares at a discount.

If not, you keep the premium.

When to use

You want to buy shares at cheaper levels.

You are comfortable owning the stock.

Risk and reward

Risk: You may need to buy shares if the stock falls heavily.

Reward: Limited to premium collected.

Example

Bank Nifty at 50,000
Sell 49,500 put at ₹100 premium
If Bank Nifty stays above 49,500 → you earn ₹100 × lot size.