Selling cash-secured puts on MSFT

Selling a put transfers the downside between $450 and zero to you, and you are paid $9.00 per share for taking it. "Cash-secured" simply means you hold the $45,000 required to buy the shares instead of leaning on margin. Same position, honest denominator.

At August 28, 2026: above $450 the put expires worthless and you keep $900 — that is the maximum this trade can make, $900. Below it you're assigned 100 shares at $450, with an effective cost basis of $441 once the credit is applied. That is 5.1% below where MSFT trades today.

The engine puts the probability of keeping the full credit at 74% on MSFT at $464.72 with 31% ATM implied vol on the Aug 28 expiry. High win rate, capped payoff, uncapped-to-zero loss — the risk profile of every short-premium trade. It is not free money; it is a rent cheque for underwriting someone else's insurance.

Max loss is $44,100 — the strike, less the credit, times 100, if MSFT goes to zero. That number is not theoretical on single names; it is simply unlikely. Size the position against that figure, not against the premium.

Assignment is not the loss — being assigned at $450 when MSFT is at $360 is. If you are running the wheel, that is the moment the plan is tested: you own shares at a basis of $441 and the market disagrees.

Liquidity is a risk, not a convenience. The moment you most want out of a short-premium position is the moment the spread is widest, and the exit price you modelled at mid will not be available.

Microsoft is what a premium seller's underlying is supposed to look like: implied vol that sits a couple of points above realized between prints, a share price high enough that one contract is a meaningful position, and a dividend small enough that early assignment is a calendar check rather than a constant threat. The yields are unglamorous. They are also the ones that survive a decade.

MSFT's Aug 28 strikes are $5 apart near the money (1.08% of spot). Enough rungs to express a view, few enough that each one moves the economics visibly. 32k contracts of open interest on Aug 28 is workable around the money and thin in the wings — width costs more here than the ladder suggests. 25 strikes on that expiry — 35% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Tight at every listed strike; round-number strikes carry the open interest and the best fills.

Skew is inverted: the 25-delta CALL implies 1.8% more vol than the put. That is the market pricing upside risk above downside risk — a squeeze, a takeover rumour, or a crowded short. Selling calls into an inverted skew pays better than usual and is riskier than usual for exactly the same reason. The term structure is flat inside 1.5% between the two captured expiries, so there is no calendar edge to harvest and no event visibly priced into one month over the other.

At 31% ATM implied vol, the Aug 28 options are pricing a one-standard-deviation move of $38.59 over 27 days — roughly −8.3% to +8.3%, or $426.13 to $503.31. Everything the cash-secured put above collects is rent on that range. If MSFT routinely covers 8.3% in 27 days, the credit is fair compensation rather than edge.

The specific way people lose money on MSFT: Assuming a quiet chart means quiet options. Microsoft's earnings gaps have repeatedly cleared the implied move while the between-print tape stayed asleep.