A put option in which an investor writes a put contract and then deposits into the broker's account an amount equal to the put's strike price, in an event the option is exercised. The money deposited acts as a guarantee to the broker that the investor will be able to meet the conditions of the contract. Meanwhile, the deposit may be invested in short-term investment to yield interest.
Related information about cash-secured put:
- Cash-Secured Put
Description. The cash-secured put involves writing an at-the-money or out-of-the- money put option and simultaneously setting aside enough cash to buy the ...
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