LMT Cash-Secured Put Strategy
LMT (Lockheed Martin Corporation), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.
Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. It operates through four segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. The Aeronautics segment offers combat and air mobility aircraft, unmanned air vehicles, and related technologies. The Missiles and Fire Control segment provides air and missile defense systems; tactical missiles and air-to-ground precision strike weapon systems; logistics; fire control systems; mission operations support, readiness, engineering support, and integration services; manned and unmanned ground vehicles; and energy management solutions. The Rotary and Mission Systems segment offers military and commercial helicopters, surface ships, sea and land-based missile defense systems, radar systems, sea and air-based mission and combat systems, command and control mission solutions, cyber solutions, and simulation and training solutions. The Space segment offers satellites; space transportation systems; strategic, advanced strike, and defensive missile systems; and classified systems and services in support of national security systems.
LMT (Lockheed Martin Corporation) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $119.88B, a trailing P/E of 24.94, a beta of 0.10 versus the broader market, a 52-week range of 410.11-692, average daily share volume of 1.6M, a public-listing history dating back to 1977, approximately 121K full-time employees. These structural characteristics shape how LMT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.10 indicates LMT has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. LMT 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 LMT?
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 LMT snapshot
As of May 14, 2026, spot at $519.13, ATM IV 28.84%, IV rank 47.10%, expected move 8.27%. The cash-secured put on LMT 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 28-day expiry.
Why this cash-secured put structure on LMT specifically: LMT IV at 28.84% is mid-range versus its 1-year history, so the credit collected on a LMT cash-secured put sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 8.27% (roughly $42.93 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated LMT expiries trade a higher absolute premium for lower per-day decay. Position sizing on LMT should anchor to the underlying notional of $519.13 per share and to the trader's directional view on LMT stock.
LMT cash-secured put setup
The LMT 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 LMT near $519.13, the first option leg uses a $495.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LMT chain at a 28-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 LMT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Put | $495.00 | $8.55 |
LMT cash-secured put risk and reward
- Net Premium / Debit
- +$855.00
- Max Profit (per contract)
- $855.00
- Max Loss (per contract)
- -$48,644.00
- Breakeven(s)
- $486.45
- Risk / Reward Ratio
- 0.018
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
LMT cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put on LMT. 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% | -$48,644.00 |
| $114.79 | -77.9% | -$37,165.86 |
| $229.57 | -55.8% | -$25,687.72 |
| $344.35 | -33.7% | -$14,209.58 |
| $459.14 | -11.6% | -$2,731.44 |
| $573.92 | +10.6% | +$855.00 |
| $688.70 | +32.7% | +$855.00 |
| $803.48 | +54.8% | +$855.00 |
| $918.26 | +76.9% | +$855.00 |
| $1,033.04 | +99.0% | +$855.00 |
When traders use cash-secured put on LMT
Cash-secured puts on LMT earn premium while a trader waits to acquire LMT stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning LMT.
LMT thesis for this cash-secured put
The market-implied 1-standard-deviation range for LMT extends from approximately $476.20 on the downside to $562.06 on the upside. A LMT cash-secured put lets a trader earn premium while waiting to acquire LMT 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 LMT IV rank near 47.10% is mid-range against its 1-year distribution, so the IV signal is neutral; the cash-secured put thesis on LMT should anchor more to the directional view and the expected-move geometry. As a Industrials name, LMT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LMT-specific events.
LMT 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. LMT positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LMT alongside the broader basket even when LMT-specific fundamentals are unchanged. Short-premium structures like a cash-secured put on LMT carry tail risk when realized volatility exceeds the implied move; review historical LMT earnings reactions and macro stress periods before sizing. Always rebuild the position from current LMT chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on LMT?
- A cash-secured put on LMT is the cash-secured put strategy applied to LMT (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 LMT stock trading near $519.13, the strikes shown on this page are snapped to the nearest listed LMT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LMT 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 LMT cash-secured put priced from the end-of-day chain at a 30-day expiry (ATM IV 28.84%), the computed maximum profit is $855.00 per contract and the computed maximum loss is -$48,644.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LMT cash-secured put?
- The breakeven for the LMT cash-secured put priced on this page is roughly $486.45 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 LMT market-implied 1-standard-deviation expected move is approximately 8.27%; 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 LMT?
- Cash-secured puts on LMT earn premium while a trader waits to acquire LMT stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning LMT.
- How does current LMT implied volatility affect this cash-secured put?
- LMT ATM IV is at 28.84% with IV rank near 47.10%, 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.