Canadian Securities Course (CSC) Level 1 Test 2025 – 400 Free Practice Questions to Pass the Exam

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What is a cash secured put?

Writing a put without having cash reserves

Writing a put with less cash than the put value

Writing a put with cash put aside to cover its potential assignment

A cash secured put is an options strategy where the investor writes a put option while also setting aside enough cash to buy the underlying asset if the option is exercised. This strategy is considered less risky than writing a put without cash reserves (option A) or with less cash than the put value (option B) because it ensures that there are funds available to fulfill the obligation if the option is assigned. Buying a put using cash reserves (option D) is a different options strategy where the investor pays for the right to sell the underlying asset at a specific price within a specified time frame.

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Buying a put using cash reserves

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