# Cash-Secured Puts vs Buy-and-Hold: 19-Year Backtest
Source: https://theoptionsbench.com/cash-secured-puts-vs-buy-and-hold/

> Plain-text mirror for AI/LLM ingestion. Canonical HTML page: https://theoptionsbench.com/cash-secured-puts-vs-buy-and-hold/

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Updated 3 September 2026 · by Theo Chen

Selling cash-secured puts is sold as steady income - so does it actually beat just holding the
index? We answered it with the **real numbers**, not a model: CBOE publishes
total-return index series for systematic option-selling, so we compared them head-to-head with
buy-and-hold over the 19 years they all share (2007-2026). The short answer:
**every flavor of option-selling trailed buy-and-hold on return - while cutting the worst
drawdown by roughly 15%-33%.** It is an income-and-stability trade, not an index-beater.
Then we used our own model to settle the question the indices can't: which strike?

## The real numbers (2007-2026)

These are the actual published CBOE total-return indices - real fills, dividends and premiums
reinvested, no option modeling - measured against buy-and-hold SPY over the identical window:

| Strategy (real CBOE index) | CAGR | Total return | Max drawdown |
| Cash-secured puts (CBOE PUT) | 6.87% | +261.2% | -37.1% |
| ATM covered calls (CBOE BXM) | 5.64% | +188.8% | -40.1% |
| 30-delta covered calls (CBOE BXMD) | 8.12% | +351.8% | -47.0% |
| Buy & hold SPY | 10.79% | +623.4% | -55.2% |

## Growth of $100k, 2007-2026

The same story as one picture: buy-and-hold (slate) pulled away on return, while the
option-income indices - cash-secured puts (gold) and 30-delta covered calls (blue) - compounded
more slowly but stayed flatter through the 2008-09 crash and the 2022 bear.

## What the real data says

Buy-and-hold won on return, and it was not close: $100k grew to
**$723k** holding the index, versus $361k for the
cash-secured put index. In a 19-year stretch dominated by a bull market, selling options
caps your upside, and that cap is expensive.

But look at the drawdowns. The cash-secured put index lost **37%**
at its worst against buy-and-hold's **55%** - it
sits in cash and is only exposed below the strike. Covered calls were different: the BXM and BXMD
indices fell 40-47%, _deeper_
than the puts, because a covered call holds the stock straight through every crash. And notice the
30-delta covered call (8.12%) beat the at-the-money one (5.64%) - the first
hint that the strike you choose matters as much as the strategy.

## Which strike should you sell? (real fills)

The real indices only come at-the-money (or, for BXMD, a single 30-delta). To see how far the strike
moves the result, we ran the same monthly cash-secured put on **real OptionsDX end-of-day SPY
option chains, 2010-2023** (163 monthly cycles). At each roll we pick the put
whose _actual_ delta is closest to the target, sell it at the **bid/ask mid**, and
hold to expiration - the full account backing one put at a time (100% cash-secured, no leverage,
collateral sitting idle). No option pricing model anywhere; these are traded prices.

| Put strike (real fills) | CAGR* | $100k became | Win rate | Worst month |
| 10-delta puts (far OTM, "safe") | 1.31% | $119k | 95.1% | -25.1% |
| 20-delta puts | 2.41% | $138k | 90.2% | -27.3% |
| 30-delta puts (income strike) | 3.51% | $160k | 84.7% | -28.5% |
| 50-delta puts (at-the-money) | 6.03% | $222k | 77.3% | -29.6% |
| Buy & hold SPY (total return) | 12.66% | $525k | - | - |

"Win rate" = the share of cycles that **ended in profit** - the premium covered any assignment loss. That is not the same as expiring out-of-the-money: near the money a put can be assigned and still pay, so the out-of-the-money share is lower. Either way it is a count, not a size: the 10-delta won 95% of its months yet compounded to just 1.31% a year.
* Fills are at the bid/ask mid; selling at the worse _bid_ instead costs about 0.1% a year (5.93% vs 6.03% at the money) - SPY is liquid enough that slippage isn't the story. Over 2010-01-04 to 2023-12-01 - the nearest points in our monthly index series to this ladder's window, each being a month's first session - the real CBOE PUT index compounded at about 7.2% a year against this ladder's 6.03% at the money. One difference behind that gap: PUT invests its collateral in Treasury bills, and this ladder leaves it idle. We do not compute a T-bill return here, so we do not attribute a share of the gap to it.

The shape is the lesson, and it is monotonic: the closer to the money you sell, the more you make. The
far-out-of-the-money "safe" 10-delta strike - the one most retail sellers reach for - made just
1.31% a year - barely above cash, before the interest this backtest leaves idle - and a fraction of the 6.03% the
at-the-money strike earned. Its thin premiums simply never added up. Same strategy, same window: the gap
between the best and worst outcome was almost entirely strike selection.

Worth spelling out, because the 10-delta result is so counterintuitive: it _won 95%
of its months_, ending almost every one in profit - yet it turned $100k into only
about $119k over 14 years, because the rare months it was assigned
gave back most of those small premiums - a single one cost 25.1%. That's the whole "win rate isn't profit" point in
one line: many small wins, a few big losses, a thin net. Win rate measures how _often_ you win, not how
_much_.

## The full year-by-year record: a defensive trade, not an outperformer

Here is **every complete calendar year** - not a hand-picked few. The column that matters is
the last one, the difference. Put-selling beat the index in only **5 of 18
years**: 2008, 2009, 2015, 2018 and 2022. Most wins came in flat or down markets, but not all - it also beat SPY in
2009 (SPY +22.7%) and 2015 (SPY +1.3%). In the other 13 up years it lagged, often badly. That is the signature
of a defensive income trade, not a rule that every up year loses and every down year wins. (This longer 30-delta series is modeled with
Black-Scholes + VIX to reach back through 2008; the real OptionsDX fills above match it to within about a
point a year.)

| Year | 30-delta CSP | Buy & hold SPY | Difference |
| 2008 | -21.9% | -36.2% | +14.3% |
| 2009 | +23.1% | +22.7% | +0.4% |
| 2010 | +8.7% | +13.1% | -4.4% |
| 2011 | -1.3% | +0.9% | -2.2% |
| 2012 | +5.9% | +14.2% | -8.3% |
| 2013 | +6.3% | +29.0% | -22.7% |
| 2014 | +4.8% | +14.6% | -9.8% |
| 2015 | +3.5% | +1.3% | +2.2% |
| 2016 | +7.3% | +13.6% | -6.3% |
| 2017 | +7.6% | +20.8% | -13.2% |
| 2018 | -5.0% | -5.2% | +0.2% |
| 2019 | +10.9% | +31.1% | -20.2% |
| 2020 | -13.8% | +17.2% | -31.0% |
| 2021 | +14.8% | +30.5% | -15.7% |
| 2022 | -0.4% | -18.6% | +18.2% |
| 2023 | +6.3% | +26.7% | -20.4% |
| 2024 | +10.2% | +25.6% | -15.4% |
| 2025 | +5.7% | +18.0% | -12.3% |

The defensive case is clearest in the down-market wins: 2008, 2018 and 2022. In 2008,
the Put Seller still lost **-21.9%** against SPY's
**-36.2%** - materially less, but still a brutal loss. You pay for that cushion in
most bull years. The honest read isn't "Put selling wins" - it's "Put selling trades away much of the good
years to soften some of the bad ones." Whether that trade is worth it, and which strike actually pays, is the
actionable part - covered below.

## The myth this kills: far-OTM Puts are not safe income

The single worst environment for option-selling is not a slow bear - it is a sharp crash followed by a
fast recovery, and 2020 is the textbook case. Here is the counterintuitive full-year result,
straight from the real fills: **the further out-of-the-money you sold, the worse the strategy finished
that calendar year.** This is not a comparison of each strike's worst month. (We unpack this trap
on its own page: why selling far-OTM puts for "safe" income
is a myth.)

| Put strike | Calendar 2020 return (real fills) |
| 10-delta puts (far OTM, "safe") | -19.8% |
| 20-delta puts | -17.2% |
| 30-delta puts (income strike) | -13.5% |
| 50-delta puts (at-the-money) | -6.1% |
| Buy & hold SPY | +17.2% |

That still breaks the "sell far-OTM Puts for safe income" pitch. The 10-delta Seller collected a few
cents of premium, then watched SPY fall roughly a third straight through the strike - the thin premium
cushioned little, so the strategy finished the year at -19.8% versus
-6.1% at-the-money. But do not turn that
calendar result into the wrong crash claim: the 10-delta's worst month was -25.1%, while the
at-the-money Put's was deeper at -29.6%. The honest conclusion is narrower and still sharp:
far-OTM produced the least long-run income and still took a severe crash hit. A high win rate did not make it safe.

And a put-seller doesn't get the rebound either - after the crash you just collect premium and watch the
V-recovery you're not part of. That is the structural cost of being short options, invisible until a 2020
happens.

## Covered calls are the same trade

The real indices above already include covered calls, and they make a point worth spelling out: a
**covered call and a cash-secured put at the same strike are the same trade.** By
put-call parity their payoffs and risk are essentially identical - both cap your upside, both leave
you exposed below the strike, both pay you a premium today. The only difference is your starting
inventory: you sell a cash-secured put when you hold **cash** and want in; you sell a
covered call when you already hold **shares** and want income.
The Wheel just alternates the two. That's why the put-write
and buy-write indices land in the same place - lower return than the index, smaller drawdown (deeper
for the share-holding buy-write). It's also why the popular covered-call income ETFs trail their index:
see what QYLD's 14% yield actually pays.

## What this study is actually for (and who should ignore it)

Fair question to ask of any backtest: what do I actually _do_ with it? Straight answer - for most
people, anyone young, accumulating, and able to leave the money alone through a crash, **this study
says buy-and-hold, full stop.** The real PutWrite index made 6.87% a year to the index's
10.79% - $361k versus $723k on $100k - and it even
loses slightly on a risk-adjusted basis. If that's you, stop here and buy the index; the drawdown you'd be
paying to avoid is just noise to you, and pretending otherwise would be a sales pitch.

Here is the one finding that earns the page - the number you _cannot_ get from "buy-and-hold wins":
**the strike you pick decides everything, and the one most people default to is the loser.**
Same strategy, same 14 years of real SPY fills - the far-OTM 10-delta "safe" put returned just
1.31% a year, turning $100k into $119k - barely above cash before the idle-collateral adjustment,
while the at-the-money strike made 6.03% ($222k). It "won"
95% of its months, but a high win rate isn't profit: the thin premium never paid for
the rare deep hit. In calendar 2020, the 10-delta returned
_-19.8%_ versus -6.1%
at-the-money; across their worst months, the order reversed at -25.1% versus
-29.6%. The long-run CAGR gap - 1.31% versus 6.03% - was
driven by nothing but where you set the strike. If you sell 5-10 delta Puts
to feel safe, that is the exact mistake this study tells you to stop making.

The second, narrower use: this is a **decumulator's tool, not an accumulator's.** If you're
drawing 4-5% a year, what decides whether you run out isn't 20-year CAGR - it's how deep the hole gets while
you're pulling cash out. Put-selling cut the worst drawdown from -55% to
-37%, and the premium is cash in hand in flat and down years when a buy-and-holder may
have to sell shares at a loss to fund spending. That's sequence-of-returns insurance, worth a point of return
- but only if a drawdown would actually cost you. The honest catch: a sharp crash-and-rebound breaks it. In
2020, the Put Seller finished -13.8% while the index finished
+17.2% - it ate the drop and missed the bounce.

**If you're going to sell puts anyway, the one rule that matters:** sell the income strike
(around 30-delta) on a stock you'd be happy to own, when IV is high - never the far-OTM "safe" strike, the
one that barely beat cash before the idle-collateral adjustment, still took a severe crash loss, and finished the crash year worst. Check whether premium is genuinely rich with the
IV rank calculator, and size the strike to a real dollar yield with the
cash-secured put calculator: if the annualized return on capital
is low single digits with a huge cushion, you're in the 10-delta trap.

## Caveats - read these

- Two real datasets, two windows. The headline CBOE PUT/BXM/BXMD figures are published total-return indices (2007-2026). The strike ladder is real OptionsDX end-of-day SPY fills (2010-2023) - also real, just a shorter window the free option data covers (it includes the 2020 crash but not 2008). The year-by-year 30-delta table above extends to 2026 with a Black-Scholes + VIX model, which the real fills confirm to within about a point a year.
- Idle collateral. The ladder leaves the cash collateral earning nothing. Parking it in T-bills (near zero in the early 2010s, ~5% by 2023) would lift every row a little - but nowhere near enough to close the gap to buy-and-hold's 12.66%.
- One window, dominated by a bull market. 2007-2026 starts just before the 2008 crash and is mostly a historic bull run, which maximally penalizes any capped-upside strategy. A different 19 years would land differently.
- Indices aren't free to run. The published series exclude the fund fees, commissions, slippage and taxes a real seller pays - so a real-world result would be a touch lower than the index.
- No active management. These are mechanical, hold-to-expiration rules - no rolling, no closing at a profit target, no dodging earnings. Active management changes the picture.
- Past performance is not predictive. Educational, not advice.

Sources: CBOE PUT / BXM / BXMD total-return indices and SPY dividend-adjusted prices (2007-02-16 to
2026-05-15) for the headline; real OptionsDX end-of-day SPY option chains (2010-01-15 to
2023-12-15) for the strike ladder, sold at the bid/ask mid with strikes chosen by actual delta. Every
figure regenerates from the underlying data; none are hand-entered. Every backtest behind this site,
including this one, is published as plain JSON and CSV at /data/, licensed
CC BY 4.0 for reuse with attribution.

Cite this study

Theo Chen. Cash-Secured Puts vs Buy-and-Hold: Yearly Returns. The Options Bench, 2026.
https://theoptionsbench.com/cash-secured-puts-vs-buy-and-hold/. Licensed under CC BY 4.0.

Download the underlying data: JSON CSV

The bottom line

Over 19 years, every systematic option-selling index in this comparison - Cash-Secured Puts and Covered Calls alike - trailed buy-and-hold on total return, while producing roughly 15%-33% shallower worst drawdowns. These are income-and-stability trades, not index-beaters - and which strike you sell decides how much return you keep.

## Frequently asked questions
Does selling cash-secured puts beat buy-and-hold?

No. Over 19 years (2007-2026), the real CBOE PutWrite index - systematic at-the-money cash-secured puts on the S&P 500 - returned 6.87% a year versus 10.79% for holding the index. It trades return for a smoother ride (a 37% worst drawdown versus 55%), not for beating the market.

Are these real numbers or a model?

Mostly real. The headline figures are the published CBOE total-return indices (PUT for put-writing, BXM and BXMD for covered calls). The strike-by-strike ladder uses real OptionsDX end-of-day SPY option chains (2010-2023): we read the actual delta to pick each strike and sell at the actual bid/ask mid. The one modelled piece is the year-by-year 30-delta series, which uses Black-Scholes with VIX to reach back through 2008 - the real fills confirm it at that strike.

Are covered calls the same as cash-secured puts?

By put-call parity, a cash-secured put and a covered call at the same strike have essentially the same payoff and risk. The real indices bear it out: both the put-write and the buy-write indices trailed buy-and-hold. You sell puts when you hold cash and want in; you sell calls when you already hold shares and want income.

Why do covered calls have a deeper drawdown than cash-secured puts?

A covered call holds the stock through every crash, so it eats the full downside (the BXM index fell 40%). A cash-secured put sits in cash and is only exposed below the strike, so its worst drawdown was shallower (37%). Same income trade, different collateral.

What delta should I sell cash-secured puts at?

It is the biggest lever, and the popular answer is the wrong one. On real SPY fills (2010-2023) the at-the-money strike compounded fastest (6.03% a year) while the far-out-of-the-money "safe" 10-delta made just 1.31% - barely above cash before the interest this backtest leaves idle, despite winning 95% of months. Across calendar 2020, the 10-delta returned -19.8% versus -6.1% at-the-money. Those are full-year returns, not crash-month losses: the worst months were -25.1% and -29.6%, respectively, reversing the order. Thin premium did not make the far-OTM strike a good income trade, but the data does not say it had the deeper worst month.

## Related questions

- Does the Wheel strategy beat buy-and-hold?
- What is a covered call?
- Cash-secured put vs buying the stock outright?