KMX Cash-Secured Put Strategy
KMX (CarMax, Inc.), in the Consumer Cyclical sector, (Auto - Dealerships industry), listed on NYSE.
CarMax, Inc., together with its subsidiaries, operates as a retailer of used vehicles in the United States. The company operates through two segments, CarMax Sales Operations and CarMax Auto Finance. It offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; and extended protection plans to customers at the time of sale, as well as sells vehicles that are approximately 10 years old and has more than 100,000 miles through wholesale auctions. The company also provides reconditioning and vehicle repair services; and financing alternatives for retail customers across a range of credit spectrum through its CarMax Auto Finance and arrangements with various financial institutions. As of February 28, 2022, it operated approximately 230 used car stores. CarMax, Inc. was founded in 1993 and is based in Richmond, Virginia.
KMX (CarMax, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Dealerships, with a market capitalization of approximately $5.26B, a trailing P/E of 22.07, a beta of 1.18 versus the broader market, a 52-week range of 30.26-71.99, average daily share volume of 3.3M, a public-listing history dating back to 1997, approximately 30K full-time employees. These structural characteristics shape how KMX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.18 places KMX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a cash-secured put on KMX?
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 KMX snapshot
As of May 15, 2026, spot at $37.01, ATM IV 68.00%, IV rank 61.50%, expected move 19.50%. The cash-secured put on KMX 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 63-day expiry.
Why this cash-secured put structure on KMX specifically: KMX IV at 68.00% is mid-range versus its 1-year history, so the credit collected on a KMX cash-secured put sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 19.50% (roughly $7.22 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KMX expiries trade a higher absolute premium for lower per-day decay. Position sizing on KMX should anchor to the underlying notional of $37.01 per share and to the trader's directional view on KMX stock.
KMX cash-secured put setup
The KMX 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 KMX near $37.01, the first option leg uses a $35.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KMX chain at a 63-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 KMX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Put | $35.00 | $2.60 |
KMX cash-secured put risk and reward
- Net Premium / Debit
- +$260.00
- Max Profit (per contract)
- $260.00
- Max Loss (per contract)
- -$3,239.00
- Breakeven(s)
- $32.40
- Risk / Reward Ratio
- 0.080
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
KMX cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put on KMX. 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% | -$3,239.00 |
| $8.19 | -77.9% | -$2,420.80 |
| $16.37 | -55.8% | -$1,602.60 |
| $24.56 | -33.7% | -$784.40 |
| $32.74 | -11.5% | +$33.80 |
| $40.92 | +10.6% | +$260.00 |
| $49.10 | +32.7% | +$260.00 |
| $57.28 | +54.8% | +$260.00 |
| $65.47 | +76.9% | +$260.00 |
| $73.65 | +99.0% | +$260.00 |
When traders use cash-secured put on KMX
Cash-secured puts on KMX earn premium while a trader waits to acquire KMX stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning KMX.
KMX thesis for this cash-secured put
The market-implied 1-standard-deviation range for KMX extends from approximately $29.79 on the downside to $44.23 on the upside. A KMX cash-secured put lets a trader earn premium while waiting to acquire KMX 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 KMX IV rank near 61.50% is mid-range against its 1-year distribution, so the IV signal is neutral; the cash-secured put thesis on KMX should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, KMX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KMX-specific events.
KMX 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. KMX positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KMX alongside the broader basket even when KMX-specific fundamentals are unchanged. Short-premium structures like a cash-secured put on KMX carry tail risk when realized volatility exceeds the implied move; review historical KMX earnings reactions and macro stress periods before sizing. Always rebuild the position from current KMX chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on KMX?
- A cash-secured put on KMX is the cash-secured put strategy applied to KMX (stock). 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 KMX stock trading near $37.01, the strikes shown on this page are snapped to the nearest listed KMX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KMX 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 KMX cash-secured put priced from the end-of-day chain at a 30-day expiry (ATM IV 68.00%), the computed maximum profit is $260.00 per contract and the computed maximum loss is -$3,239.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a KMX cash-secured put?
- The breakeven for the KMX cash-secured put priced on this page is roughly $32.40 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 KMX market-implied 1-standard-deviation expected move is approximately 19.50%; 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 KMX?
- Cash-secured puts on KMX earn premium while a trader waits to acquire KMX stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning KMX.
- How does current KMX implied volatility affect this cash-secured put?
- KMX ATM IV is at 68.00% with IV rank near 61.50%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.