# How Much Money Do You Need to Sell Options?
Source: https://theoptionsbench.com/guides/how-much-money-to-sell-options/

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How much you need ranges from a few hundred dollars to many thousands per position, depending entirely on *which* trade you sell. A **cash-secured put** ties up the **strike price x 100** in cash. A **covered call** needs **100 shares** of the stock, which is roughly the share price x 100. A **defined-risk credit spread** needs only the **strike width minus the credit**, times 100, which is often just a few hundred dollars. The wheel needs the most, because it starts with a cash-secured put you must be able to honour.

## How much capital does a cash-secured put need?

A cash-secured put is "secured" because you set aside the full cash to buy the shares if you are assigned. That cash is the capital requirement:

> Capital = strike price x 100 (per contract)

Sell one $50-strike put and you reserve **$5,000**. You collect the premium up front, so your real outlay is slightly less, but the broker holds the full amount against possible assignment. The [Cash-Secured Put Calculator](/cash-secured-put-calculator/) shows the return on that capital and your effective cost basis if the shares are put to you.

A note on margin: a *naked* put (not cash-secured) reserves far less under margin rules, but it is a different, riskier trade. For the income approach this site focuses on, assume the full cash-secured amount. See [how much buying power options use](/guides/how-much-buying-power-do-options-use/) to compare the cash-secured, naked-margin and spread requirements side by side.

## How much capital does a covered call need?

A covered call sells one call against **100 shares you already own**. The capital is the cost of those shares:

> Capital = share price x 100 (per contract), as stock

On a $50 stock that is **$5,000** tied up in the position, the same ballpark as the cash-secured put at the same strike. That is no accident: by put-call parity a covered call and a cash-secured put at the same strike have the same payoff shape, so they demand similar capital. The [Covered Call Calculator](/covered-call-calculator/) models the income and the capped upside.

## How much capital does the wheel need?

The wheel starts by selling cash-secured puts, so its minimum is the same as a cash-secured put: **enough cash to be assigned 100 shares of your chosen stock**. On a $50 stock, that is about **$5,000** to run a single contract through the full cycle (sell puts, get assigned, sell covered calls, get called away, repeat). Pick a cheaper underlying and the requirement falls proportionally. The [Wheel Strategy Calculator](/wheel-strategy-calculator/) tracks premium and cost basis across the cycles.

## Defined-risk spreads: the cheapest way in

This is where the capital requirement drops sharply. A **credit spread** (such as a bull put spread) buys a protective long option below the one you sell, so the broker only reserves the worst case:

> Capital = (strike width - net credit) x 100 (per contract)

Sell a $50 put and buy a $45 put for a $1.20 net credit, and the most you can lose is (5 - 1.20) x 100 = **$380**. That same bullish-income view cost $5,000 as a cash-secured put. The trade-off is a smaller absolute premium and a hard cap on the loss if the stock falls through your long strike. The [Bull Put Spread Calculator](/bull-put-spread-calculator/) returns the exact capital at risk and return on it.

## Worked examples, side by side

For a single contract on a $50 stock:

- **Cash-secured put** ($50 strike): about **$5,000** in cash.
- **Covered call** ($50 stock): about **$5,000** in shares.
- **The wheel** ($50 stock): about **$5,000** to start, then it recycles.
- **Bull put spread** ($50 / $45, $1.20 credit): about **$380** at risk.

Same income idea, an order of magnitude apart in capital. The spread frees up cash and caps the loss; the cash-secured strategies collect a larger dollar premium and can leave you owning a stock you like.

## How much of your account per trade?

Having enough capital to *open* a trade is not the same as it being a sensible *size*. A common rule is to risk only a small slice of the account on any one position, so a single bad trade cannot do lasting damage. The [Kelly Criterion Position Sizing](/position-sizing/) tool turns your edge and account size into a suggested position size, including the more conservative half- and quarter-Kelly fractions most traders actually use.

## A realistic minimum to start

You do **not** need $25,000. The pattern-day-trader rule that sets that floor applies only to frequent day trading, not to holding income positions for weeks. In practice:

- A single **defined-risk spread** can be opened with a **few hundred dollars** of capital at risk.
- A **cash-secured put** or **covered call** on a lower-priced stock or ETF (say $20 a share) needs about **$2,000** per contract.
- The **wheel** on a moderate stock realistically wants **$3,000 to $6,000** per contract so you can comfortably take assignment.

Start with the structure your account can support, size each position small, and let the premium compound. The cheapest honest way in is a defined-risk spread; the cash-secured strategies ask for more capital but hand you a larger premium and, if assigned, a stock you were happy to own.