RCAT Cash-Secured Put Strategy
RCAT (Red Cat Holdings, Inc.), in the Technology sector, (Computer Hardware industry), listed on NASDAQ.
Red Cat Holdings, Inc., through its subsidiaries, provides various products, services, and solutions to the drone industry. It offers commercial and government unmanned aerial vehicle technology for reconnaissance, public safety, and inspection applications. The company also provides First Person View (FPV) video goggles; and software and hardware solutions that enable drones to complete inspection services in locations where global positioning systems are not available. In addition, it is involved in the sales of FPV drones and equipment primarily to the consumer marketplace. Red Cat Holdings, Inc.is based in San Juan, Puerto Rico.
RCAT (Red Cat Holdings, Inc.) trades in the Technology sector, specifically Computer Hardware, with a market capitalization of approximately $929.3M, a beta of 1.22 versus the broader market, a 52-week range of 5.71-18.78, average daily share volume of 14.9M, a public-listing history dating back to 2002, approximately 115 full-time employees. These structural characteristics shape how RCAT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.22 places RCAT 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 RCAT?
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 RCAT snapshot
As of May 15, 2026, spot at $9.50, ATM IV 86.65%, IV rank 0.40%, expected move 24.84%. The cash-secured put on RCAT 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 RCAT specifically: RCAT IV at 86.65% is on the cheap side of its 1-year range, which means a premium-selling RCAT cash-secured put collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 24.84% (roughly $2.36 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 RCAT expiries trade a higher absolute premium for lower per-day decay. Position sizing on RCAT should anchor to the underlying notional of $9.50 per share and to the trader's directional view on RCAT stock.
RCAT cash-secured put setup
The RCAT 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 RCAT near $9.50, the first option leg uses a $9.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RCAT 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 RCAT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Put | $9.00 | $0.63 |
RCAT cash-secured put risk and reward
- Net Premium / Debit
- +$62.50
- Max Profit (per contract)
- $62.50
- Max Loss (per contract)
- -$836.50
- Breakeven(s)
- $8.38
- Risk / Reward Ratio
- 0.075
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
RCAT cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put on RCAT. 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 | -99.9% | -$836.50 |
| $2.11 | -77.8% | -$626.56 |
| $4.21 | -55.7% | -$416.62 |
| $6.31 | -33.6% | -$206.68 |
| $8.41 | -11.5% | +$3.26 |
| $10.51 | +10.6% | +$62.50 |
| $12.61 | +32.7% | +$62.50 |
| $14.71 | +54.8% | +$62.50 |
| $16.81 | +76.9% | +$62.50 |
| $18.90 | +99.0% | +$62.50 |
When traders use cash-secured put on RCAT
Cash-secured puts on RCAT earn premium while a trader waits to acquire RCAT stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning RCAT.
RCAT thesis for this cash-secured put
The market-implied 1-standard-deviation range for RCAT extends from approximately $7.14 on the downside to $11.86 on the upside. A RCAT cash-secured put lets a trader earn premium while waiting to acquire RCAT 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 RCAT IV rank near 0.40% 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 RCAT at 86.65%. As a Technology name, RCAT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RCAT-specific events.
RCAT 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. RCAT positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RCAT alongside the broader basket even when RCAT-specific fundamentals are unchanged. Short-premium structures like a cash-secured put on RCAT carry tail risk when realized volatility exceeds the implied move; review historical RCAT earnings reactions and macro stress periods before sizing. Always rebuild the position from current RCAT chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on RCAT?
- A cash-secured put on RCAT is the cash-secured put strategy applied to RCAT (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 RCAT stock trading near $9.50, the strikes shown on this page are snapped to the nearest listed RCAT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RCAT 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 RCAT cash-secured put priced from the end-of-day chain at a 30-day expiry (ATM IV 86.65%), the computed maximum profit is $62.50 per contract and the computed maximum loss is -$836.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RCAT cash-secured put?
- The breakeven for the RCAT cash-secured put priced on this page is roughly $8.38 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 RCAT market-implied 1-standard-deviation expected move is approximately 24.84%; 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 RCAT?
- Cash-secured puts on RCAT earn premium while a trader waits to acquire RCAT stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning RCAT.
- How does current RCAT implied volatility affect this cash-secured put?
- RCAT ATM IV is at 86.65% with IV rank near 0.40%, 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.