Credit Spreads · Reinis Fischer · · 4 min read

Bull Put Spread vs Cash-Secured Put: Which Is Better for Small Accounts?

One of the most common questions new options traders face is whether they should sell bull put spreads or cash-secured puts.

The answer depends on account size, risk tolerance, and investment objectives. I use both strategies in my own portfolio. However, if I were starting with a portfolio of roughly $10,000 to $20,000, I would generally prefer bull put spreads.

What Is a Cash-Secured Put?

A cash-secured put involves selling a put option while setting aside enough cash to purchase 100 shares if assigned.

For example, if you sell a put with a $75 strike price, you must be prepared to buy 100 shares at $75 per share.

Many investors use cash-secured puts to generate income while waiting to buy stocks they already want to own. This approach is particularly popular among Wheel Strategy traders.

What Is a Bull Put Spread?

A bull put spread is a defined-risk options strategy.

It involves:

  • Selling a put option
  • Buying a lower-strike put option
  • Collecting a net credit

The purchased put acts as protection and limits maximum loss. For a detailed explanation of how the strategy works, see my article: Bull Put Spread Strategy: A Complete Beginner's Guide

Why I Prefer Bull Put Spreads in Smaller Accounts

The biggest reason is capital efficiency. Let's compare two hypothetical trades.

Cash-Secured Put

Sell:

  • NFLX 84 Put

capital requirement: $8,400

Bull Put Spread

Sell:

  • NFLX 84 Put

Buy:

  • NFLX 74 Put

Capital requirement: $1,000

Bull put spreads typically require far less capital. For a smaller account, this matters.

Instead of committing most of the portfolio to a single position, I can spread risk across several trades.

Why I Use Credit Spreads as a Risk-Management Tool

This is where my approach differs from many traders. I don't view a bull put spread merely as an income strategy.

I view it as a risk-management strategy. For example, NVIDIA (NVDA) has become one of my primary options income positions.

Rather than immediately selling cash-secured puts, I often start with a weekly bull put spread. The protective long put reduces risk and limits capital requirements. If the trade works, I keep the premium and repeat the process. If the trade becomes challenged, I have several adjustment choices available.

My Adjustment Process

When a credit spread moves against me, I rarely jump directly to assignment.

Instead, I usually follow a sequence.

Step 1: Roll the Position

The first adjustment is typically rolling the spread further out in time. This gives the trade more time to recover.

Step 2: Widen the Spread

Sometimes I widen the spread. For example:

Original spread:

  • 205/195

Width: $10

Adjusted spread:

  • 205/185

Width: $20

This increases risk but often allows me to collect additional premium while maintaining protection.

Step 3: Convert to a Cash-Secured Put

If the stock continues moving against the position, I may eventually remove the protective put entirely. At that point, the bull put spread becomes a cash-secured put.

This increases capital requirements significantly, but it also improves the probability of the trade eventually succeeding.

In other words: I start with a defined-risk position.

Only later, if necessary, do I consider committing more capital.

NFLX Example

Recently I used this exact process with Netflix (NFLX). The original position was a bull put credit spread.

As NFLX declined and moved through my adjustment points, I rolled the trade. Eventually, I converted the spread into a cash-secured put with a lower strike price.

The final position became:

  • NFLX Aug 21, 2026 76 Cash-Secured Put

The adjustment generated additional premium and gave the position more time to work. More importantly, it demonstrated why I prefer beginning with a credit spread.

Had I started with the cash-secured put immediately, significantly more capital would have been tied up from day one.

Advantages of Bull Put Spreads

  • Defined risk
  • Lower capital requirements
  • Easier diversification
  • More flexibility for trade adjustments
  • Better suited to smaller portfolios

Advantages of Cash-Secured Puts

  • Simpler strategy
  • Easier to understand
  • Can lead to stock ownership
  • Works naturally within the Wheel Strategy
  • Often easier psychologically to manage

Which Strategy Generates More Income?

This is the wrong question. The more important question is: which strategy allows you to manage risk effectively while achieving your objectives?

In some cases, a cash-secured put may generate more premium. In others, a bull put spread may provide a better return on capital.

The answer depends on market conditions and portfolio structure.

Which Strategy Is Better?

For large accounts, the answer is less clear.

For smaller accounts, I generally prefer starting with bull put spreads.

They allow me to:

  • Define risk
  • Use less capital
  • Diversify across multiple positions
  • Retain the option of converting into a cash-secured put later if necessary

That final point is important. I don't view bull put spreads and cash-secured puts as competing strategies.nI view them as different stages of the same risk-management process.

Many of my trades begin as credit spreads. Only some eventually become cash-secured puts.

Final Thoughts

Both bull put spreads and cash-secured puts can be effective income-generating strategies. I use both regularly.

However, when managing a smaller account, I find bull put spreads offer a combination of flexibility, capital efficiency, and risk control that is difficult to ignore.

The ability to start with defined risk and later transition into a cash-secured put if necessary has become an important part of my overall portfolio management approach.

For that reason alone, bull put spreads remain one of my favorite options strategies.