Cash-Secured PutCVX · USRisk: Low

Cash-Secured Put on Chevron Corporation

Complete example: Cash-Secured Put on Chevron (CVX) — including strikes, premium, break-even, and interactive payoff diagram.

Market view

Neutral to mildly bullish

Complexity

Beginner

Sector

Energy

Typical price

$155

Explained for beginners

Cash-Secured Put in plain terms

Level

Beginner

Risk

Low to Medium

Best in

Neutral to mildly bullish

Goal

Income & entry

What is this strategy for?

Collect premium — and buy a stock at a lower price if it gets there.

When should I use it?

When you would like to buy a stock anyway, but preferably a bit cheaper.

How do I earn with it?

You sell a put option and set aside the cash to buy the stock if assigned.

What is the main risk?

If the stock drops far, you must buy it at the strike — even if it keeps falling afterward.

Who should avoid it?

If you do not want to own the stock at all, or cannot set aside the required cash.

Educational content, not investment advice. Options carry risk up to the total loss of the capital employed.

Underlying

Chevron Corporation for Options Traders

Chevron Corporation is, alongside ExxonMobil, one of the two largest integrated US oil companies and a reliable dividend aristocrat with an attractive yield (~4%). As a defensive energy stock, Chevron shows comparatively low volatility (IV typically 22-35%), driven mainly by crude oil prices (Brent/WTI) and geopolitical events. The combination of a stable dividend and moderate option premiums makes Chevron an ideal underlying for conservative covered call and cash-secured put strategies.

Symbol

CVX

Market

IV range

22–35%

Currency

USD

Options note: Traded on US exchanges (CBOE/NYSE); good options liquidity for an energy stock; American-style; weekly expirations (including 0DTE); contract size 100 shares; strikes in $2.50/$5 increments.

Overview

Cash-Secured Put — Quick Overview

In a cash-secured put, you sell a put option on a stock you'd like to own at a lower price. You keep enough cash on hand to buy the shares if necessary. The option premium is credited to your account immediately. If the option is exercised, you buy the shares at the strike — effectively at a lower price than today (strike minus premium). If it expires worthless, you simply keep the premium.

Advantages

Immediate premium income regardless of price direction
Automatically better entry price if assigned (strike − premium)
Simple to understand and implement
Lower risk than direct stock purchase (premium cushions losses)

Disadvantages

Capital is tied up for the duration of the trade (opportunity cost)
Miss out on price increases above current price (no upside exposure)
Full stock loss possible if price falls sharply after assignment
Assignment in a sharp downturn undesirable if you no longer want to own the stock

Full Cash-Secured Put Guide

Example Trade

Cash-Secured Put on Chevron

Illustrative example based on a typical Chevron price of $155. Strikes and premiums are indicative — actual market prices will vary.

Position	Type	Strike	Action	Premium
Short Put (sold)	Put	$148	Sell (credit)	+$3,10
Net credit received				+$3,10 ($310 per contract)

Max Profit

$310

per contract

Max Loss

-$14.440

per contract

Break-even

$144

Payoff

Payoff Diagram at Expiration

Profit and loss of the Cash-Secured Put on Chevron depending on the price at expiration. Values per contract (100 shares).

Suitability

Why Cash-Secured Put for Chevron?

This stock is a classic underlying for cash-secured puts: stable fundamentals, moderate volatility, attractive entry price if assigned. Sell puts 5% below the current price with 30-45 days to expiration for a balanced premium/risk ratio. The dividend yield makes assignment during a price decline additionally attractive.

When is the right time?

1The stock would be attractive to you at a 5-10% lower price
2IV Rank elevated (above 30%) for better premiums
3Sufficient capital available (strike × 100 shares)
4No upcoming earnings event within the term (or intentionally timed around it)
5Underlying fundamentally attractive — you genuinely want to own it if assigned

Deep Dive

Why Chevron for Options Traders

Chevron Corporation is a commodity-linked energy stock with low to moderate implied volatility (IV typically 22–35%). The options trade on US exchanges (American-style, weekly expirations, partly 0DTE, contract size 100 shares). For options traders this means: premiums are reliable, if conservative. That makes Chevron particularly suited to defensive income strategies and defined-risk spreads. One contract equals 100 shares — at a typical price near $155, a single contract ties up roughly $15,500 of capital, which should be factored into position sizing.

Strategy Notes

Cash-Secured Put on Chevron: Practical Notes

Cash-Secured Put on Chevron let you collect premium and potentially buy the stock cheaper. At a price near $155 a contract ties up about $15,500 — check beforehand whether you'd still want Chevron after a pullback.

Historical Context

Energy stocks are tightly coupled to oil and gas prices and react to geopolitical events and OPEC decisions. They often pay solid dividends. For Chevron, implied volatility has historically ranged around 22–35%; at the lower end of that band options are cheap, at the upper end correspondingly expensive. Because the options are American-style, early assignment of short calls is possible around dividends. Anyone trading Chevron options should know the timing of quarterly reports and plan positions deliberately around those dates.

FAQ

FAQ: Cash-Secured Put on Chevron

Which options strategy is best for Chevron?

Given Chevron's low to moderate implied volatility (IV ~22–35%), the best fits are covered calls and cash-secured puts (income), plus cheap butterflies. The right strategy always depends on your market view and risk tolerance — use the filters above to compare strategies by goal and risk.

Are Chevron options suitable for beginners?

Chevron is one of the calmer underlyings and, with a simple income strategy (covered call on shares you own), is quite suitable for getting started. Note: options trading carries risk — this is educational content, not investment advice.

How high is implied volatility on Chevron?

Chevron's implied volatility typically sits between 22% and 35% — a low to moderate level. At the low end options are cheap (good for buyers), at the high end expensive (good for sellers). IV usually rises into earnings and falls afterwards.

CFD or options for Chevron — which is better?

CFDs are simpler and meant for short-term directional speculation, but carry linear loss risk and ongoing financing costs. Options offer defined risk, income and hedging strategies and benefit from time decay — but are more complex. For Chevron with low to moderate IV, options strategies are especially versatile. Compare suitable brokers via the button on this page.

Where are Chevron options traded?

Chevron options are traded on US exchanges. The options trade on US exchanges (American-style, weekly expirations, partly 0DTE, contract size 100 shares). Watch for adequate liquidity (tight bid-ask spreads) and prefer monthly standard expirations for the best execution.