Collateral, return on capital, annualized yield and breakeven for a put you're thinking about selling.
Trade details
Results
$50 strike ties up $5,000 per contract, and it's tied up until the put closes.A 30-day put
Sell one $50 put for $1.20 with 30 days to expiration.
Collateral $5,000, premium $120.
Return on capital: $120 / $5,000 = 2.4%.
Annualized: 2.4% × (365/30) = 29.2%.
Breakeven: $50 − $1.20 = $48.80.
Annualized is a rate, not a forecast
29.2% assumes you repeat this trade every 30 days for a year at the same premium, which nobody does — capital sits idle between trades, volatility changes, and one assignment ties the collateral up for months. Use annualized to compare two trades against each other, not to project a year of returns.
The calculator says nothing about whether the trade is *wise*. That's a question about the stock, and it's covered in choosing stocks for the wheel — the short version is that unusually rich premium is usually the market pricing unusual risk.
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Getting paid to wait for a price you'd be happy to buy at — and what it costs when you're wrong.
Educational only
These figures come from the numbers you enter and standard options arithmetic. Nothing here is investment, financial, or tax advice, and a good-looking return says nothing about whether the underlying stock is a good idea.
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