Updated 2026-10-09
Value Puts: Cash-Secured Put Ideas Below Fair Value
25 stocks SageNoodle rates undervalued or fairly valued, each with a put strike at least 20% below the price and 25% below our fair value estimate, as of 2026-10-09. Selling the put pays you to wait for that entry price.
How selling puts builds a margin of safety
A cash-secured put is a promise to buy 100 shares at the strike price before expiry, with the cash set aside in advance. The buyer pays you a premium up front for that promise. The premium is the most the trade can earn; you keep it if the stock stays above the strike.
The value approach only sells puts on businesses it would be glad to own, at a strike it would be glad to pay. Every strike here sits at least 20% below the current price (the depth that defines a bear market) and at least 25% below SageNoodle's fair value estimate. If the stock falls through the strike and the shares are assigned, the effective cost is the strike minus the premium, which is further below fair value still.
Three outcomes
- The stock stays above the strike: the put expires worthless and the full premium is the return on the cash set aside.
- The stock rallies early: the put loses value quickly. Buying it back once most of the premium is captured frees the cash for a new trade and lifts the annualized return, because the same profit came in less time.
- The stock falls below the strike: you buy the shares at the strike, a price chosen in advance as a discount to fair value. That is the entry a value investor wanted, but the loss against today's price is real if the business is worth less than we think.
Reading a trade
Return on capital = premium ÷ strike. Annualized = that return × 365 ÷ days to expiry. For example, a $2.00 premium on a $40 strike is 5% on the cash set aside; over 180 days that is about 10% annualized. Compare it with what the same cash earns in Treasury bills, and check the bid-ask spread and open interest on the live chain before trading.
What can go wrong
The upside is capped at the premium while the downside runs to the strike less the premium, so a wrong fair value is the main risk. Cash tied up in a put cannot be used elsewhere. Earnings dates and dividends move option prices, and early assignment is possible on American-style options.
Methodology
Fair values come from each company's latest SageNoodle research report (probability-weighted bull, base and bear scenarios); prices refresh through the trading day. Companies whose price and valuation currencies differ are excluded. A fair value is a model output, not investment advice.