# Choosing the Strike Source: https://theoptionsbench.com/learn/cash-secured-puts/choosing-the-strike/ > Plain-text mirror for AI/LLM ingestion. Canonical HTML page: https://theoptionsbench.com/learn/cash-secured-puts/choosing-the-strike/ --- Last updated 27 May 2026 ยท by Theo Chen **The big idea:** The strike is the price you commit to buy at, so choose it for the price you want - let delta confirm the odds, not make the decision. With the why settled, the first real decision is the strike. The most common mistake is to open the option chain - your broker's grid of every available strike and expiry date - sort it by premium, and sell whatever pays the most. For a Cash-Secured Put, the premium comes last, because the strike is the price you are committing to buy at. ## Start with a stock you'd own Before any strike, ask the question the whole strategy rests on: _if I were assigned 100 shares today, would I be glad to own them?_ If the answer is no, stop - there is no premium high enough to rescue a stock you didn't want. So the first pass is a quick quality and liquidity gut-check: - Would I hold it if assigned? Understand the business or fund. For an ETF you are judging the basket, not one name. - Is it falling for a reason I can live with? A market-wide pullback is one thing; an accounting scandal or a collapsing thesis is another. - Are the options liquid? "Liquid" means the option is easy to trade in and out of. You want a tight gap between the bid (the price buyers are offering) and the ask (the price sellers want), plus healthy open interest - the number of contracts already outstanding. Both signal the option trades actively, so you get a fair price. A great idea on a thinly-traded option becomes a bad fill the moment you need to close it. The premium trap Selling on a stock you do not actually want because the premium is fat. The richest premiums sit on the riskiest names - binary-event biotech, heavily shorted meme stocks, anything with a catalyst you can't handicap. The market is paying you a lot precisely because the danger is real. ## Pick a strike you'd actually pay Choose the strike for the **price**, not the premium. It should be a level you'd be happy to own at - near a support level (a price the stock has repeatedly bounced off before), below a valuation you like, or simply lower than today. If the stock trades at $100 and you'd buy at $90, the $90 Put is the natural candidate - not the $98 Put just because it pays more. ## Let delta confirm the odds Delta is your second input, and it doubles as a rough probability gauge: a 0.30-delta Put has roughly a 30% chance of finishing in the money - that is, of being assigned - though it drifts with price, time, and volatility. Many Sellers live in the 0.20-0.30 delta band: enough premium to be worth it, with assignment the minority outcome. The options probability calculator turns that into real odds for a given strike. A simplified Put chain for a stock at $100. The **$90** strike (highlighted) sits near 0.23 **delta** - about a 23% chance of assignment, inside the 0.20-0.30 band. The gap between the **bid** ($0.95, what buyers pay) and the **ask** ($1.05, what sellers want) is the spread; 4,200 in **open interest** means plenty of contracts trade, so you'll get a fair fill. But let the chart and the price you'd pay lead; let delta confirm. Picking a strike purely because its delta "looks safe" is how you end up agreeing to buy a stock at a price you never actually liked. For the full method - support, valuation, and how delta fits - see How to Choose a Strike Price. ## Key takeaways - Screen the underlying first - only sell on a stock or ETF you'd be glad to own. - Set the strike at a price you'd actually pay: near support, below fair value, or simply lower. - Use delta (often 0.20-0.30) to confirm the odds, not to make the decision. - A fat premium usually means real risk - ask why before you reach for it. ## Pop quiz - solidify your understanding Should you choose the strike for the price or the premium? For the price. The strike is what you commit to buy at, so it should be a level you would genuinely be happy to own - the premium comes after. What does a 0.30-delta Put roughly tell you? Roughly a 30% chance of finishing in the money (being assigned) - an approximation that shifts with price, time, and volatility. Many Sellers work in the 0.20-0.30 band. Why screen the underlying before looking at strikes? Because a strike only matters on a stock you would own. The fattest premiums often sit on the riskiest names, where the premium is high because the danger is. Following the course? Get the bi-weekly email One email every two weeks - strategy breakdowns and the edge cases these lessons cover. A good way to keep going after the course. Join the free email -> ## Frequently asked questions What is the best delta for selling Puts? There is no universal answer. Many Sellers use 0.20-0.30 for a balance of premium and a lower chance of assignment, but delta is only a rough probability. The better question is whether the strike is a price you would actually buy. Should I use technical support to pick the strike? It helps. A strike near real support or below a valuation you like gives you a price you would be comfortable owning. See the strike-price guide for the full method. A higher strike pays more premium - why not take it? A higher strike means a higher chance of assignment and less cushion. Premium rises with risk; the question is always whether you would happily own the stock at that strike. Share: TC Theo Chen Founder, The Options Bench Theo has traded options as a retail trader out of Asia for over a decade, focused on income strategies - covered calls, cash-secured puts and the wheel, managed around days-to-expiration and the Greeks rather than gut feel. He builds these calculators to get the awkward edge cases right, the ones most options tools quietly skip.