DEM Cash-Secured Put Strategy
DEM (WisdomTree Emerging Markets High Dividend Fund), in the Financial Services sector, (Asset Management industry), listed on AMEX.
Under normal circumstances, at least 95% of the fund's total assets (exclusive of collateral held from securities lending) will be invested in component securities of the index and investments that have economic characteristics that are substantially identical to the economic characteristics of such component securities. The index is a fundamentally weighted index that is comprised of the highest dividend-yielding common stocks selected from the WisdomTree Emerging Markets Dividend Index. The fund is non-diversified.
DEM (WisdomTree Emerging Markets High Dividend Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $3.69B, a beta of 0.70 versus the broader market, a 52-week range of 43.64-54.84, average daily share volume of 254K, a public-listing history dating back to 2007. These structural characteristics shape how DEM etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.70 places DEM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. DEM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a cash-secured put on DEM?
A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike.
Current DEM snapshot
As of May 15, 2026, spot at $52.88, ATM IV 17.80%, IV rank 16.34%, expected move 5.10%. The cash-secured put on DEM below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 34-day expiry.
Why this cash-secured put structure on DEM specifically: DEM IV at 17.80% is on the cheap side of its 1-year range, which means a premium-selling DEM cash-secured put collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 5.10% (roughly $2.70 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DEM expiries trade a higher absolute premium for lower per-day decay. Position sizing on DEM should anchor to the underlying notional of $52.88 per share and to the trader's directional view on DEM etf.
DEM cash-secured put setup
The DEM cash-secured put below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With DEM near $52.88, the first option leg uses a $50.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DEM chain at a 34-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 DEM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Put | $50.00 | $0.21 |
DEM cash-secured put risk and reward
- Net Premium / Debit
- +$21.00
- Max Profit (per contract)
- $21.00
- Max Loss (per contract)
- -$4,978.00
- Breakeven(s)
- $49.79
- Risk / Reward Ratio
- 0.004
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
DEM cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put on DEM. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$4,978.00 |
| $11.70 | -77.9% | -$3,808.90 |
| $23.39 | -55.8% | -$2,639.81 |
| $35.08 | -33.7% | -$1,470.71 |
| $46.77 | -11.5% | -$301.62 |
| $58.46 | +10.6% | +$21.00 |
| $70.16 | +32.7% | +$21.00 |
| $81.85 | +54.8% | +$21.00 |
| $93.54 | +76.9% | +$21.00 |
| $105.23 | +99.0% | +$21.00 |
When traders use cash-secured put on DEM
Cash-secured puts on DEM earn premium while a trader waits to acquire DEM etf at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning DEM.
DEM thesis for this cash-secured put
The market-implied 1-standard-deviation range for DEM extends from approximately $50.18 on the downside to $55.58 on the upside. A DEM cash-secured put lets a trader earn premium while waiting to acquire DEM at the strike price; the strategy is most attractive when the trader is comfortable holding the underlying at that level and IV is rich enough to compensate for the assignment risk. Current DEM IV rank near 16.34% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on DEM at 17.80%. As a Financial Services name, DEM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DEM-specific events.
DEM cash-secured put positions are structurally neutral to slightly bullish; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. DEM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DEM alongside the broader basket even when DEM-specific fundamentals are unchanged. Short-premium structures like a cash-secured put on DEM carry tail risk when realized volatility exceeds the implied move; review historical DEM earnings reactions and macro stress periods before sizing. Always rebuild the position from current DEM chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on DEM?
- A cash-secured put on DEM is the cash-secured put strategy applied to DEM (etf). The strategy is structurally neutral to slightly bullish: A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike. With DEM etf trading near $52.88, the strikes shown on this page are snapped to the nearest listed DEM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DEM cash-secured put max profit and max loss calculated?
- Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium. For the DEM cash-secured put priced from the end-of-day chain at a 30-day expiry (ATM IV 17.80%), the computed maximum profit is $21.00 per contract and the computed maximum loss is -$4,978.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DEM cash-secured put?
- The breakeven for the DEM cash-secured put priced on this page is roughly $49.79 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current DEM market-implied 1-standard-deviation expected move is approximately 5.10%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a cash-secured put on DEM?
- Cash-secured puts on DEM earn premium while a trader waits to acquire DEM etf at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning DEM.
- How does current DEM implied volatility affect this cash-secured put?
- DEM ATM IV is at 17.80% with IV rank near 16.34%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.