Put-write strategy

Also called: Put-writing, Short put strategy

A put-write strategy repeats the cash-secured put as a program rather than a one-off trade. It sells puts on an index or stock on a rolling schedule and treats the collected premium as the source of return.

How is a put-write different from a single cash-secured put?

A cash-secured put is one position. A put-write strategy is the same mechanic run continuously — sell, let expire or roll, sell again — so the return comes from harvesting the option risk premium over many cycles. Index put-write programs are a recognized way to capture the gap between implied and realized volatility.

The trade-off is asymmetry: premium accrues steadily in calm markets, while a sharp decline produces a concentrated loss on assignment. Sizing and collateral discipline are what keep the program intact through a drawdown.

This definition is for educational and informational purposes only and is not investment, tax, or legal advice. Option strategies involve risk and are not suitable for all investors. Tax treatment of options is complex and depends on individual circumstances, holding periods, and applicable law. Consult a qualified tax professional and investment advisor before acting. Yayati Asset Management is a Registered Investment Adviser.