What Happens When a Cash Secured Put Expires?

When your CSP reaches expiration, one of two things happens:

Scenario 1: Expires Worthless (OTM) ✅

If stock price > strike price:

Put expires worthless

You keep the entire premium

Your cash is freed up

You can sell another put

Example: Sold $95 put on stock at $100, stock at $102 at expiration Result: Keep premium, keep cash, sell new put

Scenario 2: Gets Assigned (ITM) 📥

If stock price < strike price:

You buy 100 shares at the strike price

Cash is used to purchase shares

You keep the premium

You now own the stock

Example: Sold $95 put for $2, stock at $90 at expiration

You buy 100 shares at $95 ($9,500)

Your cost basis: $95 - $2 = $93

Stock worth $90, paper loss $300

What Should You Do?

If Put Is OTM (Safe):

Let it expire

Sell new put on Monday

If Put Is ITM and You Want the Stock:

Let it be assigned

Start selling covered calls

If Put Is ITM and You Don't Want Stock:

Roll out to later expiration

Roll down and out for credit

Pro Tip

If assigned, immediately start selling covered calls on your new shares. This is the "wheel strategy" in action.