Crypto glossary
Cash-secured put
A cash-secured put is selling a put option while setting aside enough cash or stablecoins to buy the asset at the strike if the option is exercised.
The seller of a put takes on the obligation to buy the underlying at the strike price if the buyer exercises. In a cash-secured put, the seller keeps the full amount needed for that purchase in reserve, often in USDC or USDT, and collects the premium upfront. If price stays above the strike, the put expires and the premium is profit.
Investors use it as a way to get paid while waiting to buy at a lower price. Someone willing to buy bitcoin at 80,000 dollars can sell an 80,000 put instead of placing a limit order, earning premium in the meantime. Exchanges package the same trade as dual investment or buy-low products.
If the market crashes well below the strike, the seller still has to buy at the strike and books an immediate paper loss, softened only by the premium. Because the position is fully collateralized there is no liquidation risk, but the cash is locked until expiry and cannot be used elsewhere.
Example
With bitcoin at 95,000 dollars, a trader reserves 85,000 USDC and sells a two-week put struck at 85,000 for 1,200 dollars; BTC never drops that far, so the trader keeps the 1,200 dollars.