SHO Cash-Secured Put Strategy
SHO (Sunstone Hotel Investors, Inc.), in the Real Estate sector, (REIT - Hotel & Motel industry), listed on NYSE.
Sunstone Hotel Investors, Inc. is a lodging real estate investment trust (REIT) that as of the date of this release has interests in 19 hotels comprised of 9,997 rooms. Sunstone's business is to acquire, own, asset manage and renovate or reposition hotels considered to be Long-Term Relevant Real Estate®, the majority of which are operated under nationally recognized brands, such as Marriott, Hilton and Hyatt.
SHO (Sunstone Hotel Investors, Inc.) trades in the Real Estate sector, specifically REIT - Hotel & Motel, with a market capitalization of approximately $1.91B, a trailing P/E of 50.93, a beta of 0.97 versus the broader market, a 52-week range of 8.43-10.58, average daily share volume of 1.7M, a public-listing history dating back to 2004, approximately 36 full-time employees. These structural characteristics shape how SHO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.97 places SHO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 50.93 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. SHO 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 SHO?
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 SHO snapshot
As of May 15, 2026, spot at $10.16, ATM IV 20.30%, IV rank 3.59%, expected move 5.82%. The cash-secured put on SHO 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 SHO specifically: SHO IV at 20.30% is on the cheap side of its 1-year range, which means a premium-selling SHO cash-secured put collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 5.82% (roughly $0.59 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 SHO expiries trade a higher absolute premium for lower per-day decay. Position sizing on SHO should anchor to the underlying notional of $10.16 per share and to the trader's directional view on SHO stock.
SHO cash-secured put setup
The SHO 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 SHO near $10.16, the first option leg uses a $9.65 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SHO 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 SHO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Put | $9.65 | N/A |
SHO cash-secured put risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
SHO cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put on SHO. 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.
When traders use cash-secured put on SHO
Cash-secured puts on SHO earn premium while a trader waits to acquire SHO stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning SHO.
SHO thesis for this cash-secured put
The market-implied 1-standard-deviation range for SHO extends from approximately $9.57 on the downside to $10.75 on the upside. A SHO cash-secured put lets a trader earn premium while waiting to acquire SHO 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 SHO IV rank near 3.59% 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 SHO at 20.30%. As a Real Estate name, SHO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SHO-specific events.
SHO 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. SHO positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SHO alongside the broader basket even when SHO-specific fundamentals are unchanged. Short-premium structures like a cash-secured put on SHO carry tail risk when realized volatility exceeds the implied move; review historical SHO earnings reactions and macro stress periods before sizing. Always rebuild the position from current SHO chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on SHO?
- A cash-secured put on SHO is the cash-secured put strategy applied to SHO (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 SHO stock trading near $10.16, the strikes shown on this page are snapped to the nearest listed SHO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SHO 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 SHO cash-secured put priced from the end-of-day chain at a 30-day expiry (ATM IV 20.30%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SHO cash-secured put?
- The breakeven for the SHO cash-secured put priced on this page is no defined breakeven on the modeled curve 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 SHO market-implied 1-standard-deviation expected move is approximately 5.82%; 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 SHO?
- Cash-secured puts on SHO earn premium while a trader waits to acquire SHO stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning SHO.
- How does current SHO implied volatility affect this cash-secured put?
- SHO ATM IV is at 20.30% with IV rank near 3.59%, 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.