What are Cash-Secured Puts?
A cash-secured put is when an investor is short (or the writer of) a put, but has set aside the necessary cash as collateral to purchase shares of the underlying equity in case the put were to be assigned. Cash-secured puts are typically used when investors want to make a neutral to slightly negative bet on the price of the security.
Will I earn interest?
While you will not earn interest, Public will pay a 1% annualized rebate for all cash held as collateral to secure your short Put contracts. Learn more in our CSP rebate terms.
How it works?
Public will pay you a monthly Cash-Secured Put rebate based on the total cash set aside in your account as collateral for your short put positions. The monthly amount will be based on the cash collateral in your account on a daily basis, from the first to the last day of the month. You will receive the rebate on the 15th, or if the market is closed on the next trading day, of the subsequent month.
You can view your Cash-Secured Put rebates in your history when you filter on “Interest, dividends, and maturity”. You’ll also have the rebates in your cash and buying power.
Does all cash qualify?
Rebates will only be paid on cash set aside as collateral for short put contracts, as part of your cash-secured put strategies.
You will not earn any rebates for:
Cash collateral that has been set aside for less than a full day
Cash collateral before May 1st, 2024. All Cash-Secured Put rebates will start accruing for collateral held on May 1st, 2024, and later
You will also be excluded from earning rebates if your short puts are not fully collateralized, resulting in naked puts in your portfolio. This only happens when you do not have enough reserved buying power to cover all the cash collateral required for your short puts.
For further questions please contact Member Support via the in-app chat or email at support@public.com.
Options carry significant risk and are not suitable for all investors. Options investors can rapidly lose the value of their investment in a short period of time and incur permanent loss by expiration date. Certain complex options strategies carry additional risk. There are additional costs associated with option strategies that call for multiple purchases and sales of options. Supporting documentation for any claims will be furnished upon request. Prior to buying or selling an option, investors must read and understand the “Characteristics and Risks of Standardized Options,” which can be found at: public.com/ODD. See full terms of the Options Order Flow Rebate Program at public.com/disclosures/rebate-terms. Rebate rates are subject to change for new and existing enrollees.