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A smarter way to start investing in Rheinmetall - with more control and lower risk
Options 10 minutes to read
Koen Hoorelbeke
Investment and Options Strategist
Summary: Looking to invest in Rheinmetall but unsure about the timing? This article shows how long-term investors can use a low-risk options strategy to take control of their entry point - or get rewarded for their patience.
A smarter way to start investing in Rheinmetall — with more control and lower risk
Rheinmetall (RHMG:xetr) has earnings this week. For long-term investors looking to build a position in this defence and mobility powerhouse, elevated implied volatility provides a timely opportunity: it lifts option premiums. In this article, we explain how to use a conservative, defined-outcome strategy — without needing to buy the shares outright or expose yourself to unlimited risk.
We’ll walk through a practical example using mini-options on Rheinmetall, explain the benefits and risks, and even offer a defined-risk alternative for those who want lower exposure.
What is a cash-secured put — and why would investors use it?
A cash-secured put (CSP) is one of the most straightforward options strategies. You sell a put option on a stock you wouldn’t mind owning, and in exchange, you receive a premium up front. However, if the stock price falls below the strike price at expiry, you may be assigned — meaning you’ll be required to buy the shares at the strike price.
To prepare for this possibility, you set aside enough cash to buy the shares. That’s why it’s called “cash-secured.”
This strategy can suit long-term, buy-and-hold investors who:
- Are already interested in a stock but want to buy at a lower price.
- Want to generate income from a stock they don’t yet own.
- Prefer clearly defined outcomes with limited exposure.
The trade-off? You might not get to own the shares if the price remains above your strike. But in that case, you keep the premium.
Options carry risks and are not suitable for all investors. This article is for educational purposes only.
Why now? Volatility and earnings timing boost potential income
Options premiums are often higher when markets expect bigger price swings — such as during earnings week. This is known as implied volatility, and it’s currently elevated for Rheinmetall due to the upcoming results. Higher volatility means higher option prices, which can benefit option sellers.
We’re focusing on the 21 November 2025 expiry — the first Friday after Rheinmetall’s earnings report. That gives a 17-day window where we can potentially earn premium while controlling our risk.
A quick note on mini-options — and why they matter
Most stock options are based on 100-share contracts. But for higher-priced stocks like Rheinmetall (trading around EUR 1,725), that can make a single option position quite large. For example, 100 shares would require EUR 172,500 in capital.
Mini-options are different. Each contract represents 10 shares, giving investors much more flexibility in position sizing. You can enter the same strategies but with far less capital at stake. This makes them ideal for conservative investors or those just starting with options.
Example: selling a Rheinmetall 1,600-strike put
Important note: The strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.
At the time of writing, Rheinmetall shares are trading around EUR 1,725. We consider selling a 1,600-strike put, expiring in 17 days. This strike sits just above the lower band of the expected move around earnings — offering a decent buffer.
- Underlying price: ~EUR 1,725
- Strike sold: EUR 1,600
- Premium (mid-price): ~EUR 36.25 per share → EUR 362.50 per mini contract
- Cash reserved: EUR 16,000
- Breakeven: EUR 1,563.75
- Downside buffer: ~9.3%
If the stock stays above EUR 1,600, the option expires worthless and you keep the EUR 362.50. That’s a return of 2.27 % in 17 days (annualised c. 49 %), before fees or taxes. However, options can expire in-the-money and result in losses up to the full cash reserved, and actual returns may be lower or negative.
High returns also imply proportionally higher risk — if the stock drops below the strike, investors could face significant losses or be assigned shares at a lower market value.All figures shown are illustrative and gross of commissions, exchange fees, and taxes. Transaction costs and withholding taxes may reduce returns. Investors should consult their local tax rules and fee schedules for precise cost impacts.
This chart highlights the consolidation zone and potential support area around the 1,600 level — a key reason we chose this strike.
This snapshot shows the bid-ask spread and the implied premium available at the time of writing.
The broker ticket above outlines the payoff profile: defined premium received and capital reserved if assigned.
What if you're assigned?
If Rheinmetall closes below EUR 1,600 on 21 November, you may be assigned and end up buying 10 shares per contract at EUR 1,600 — a discount of ~EUR 125 per share. Since you collected EUR 36.25 in premium, your effective purchase price becomes EUR 1,563.75.
This offers a controlled way to enter a long-term investment. Investors often follow up by selling covered calls on the shares to generate additional income.
Want lower risk and no share assignment?
Not everyone wants the obligation of buying shares — and not every investor has EUR 16,000 in spare capital. If you’re looking to take a more active role in your investments without open-ended risk, a vertical credit spread may be a smarter starting point.
This approach lets you earn premium while defining both your potential return and your maximum risk. It’s structured, intentional, and for many buy-and-hold investors, a low-risk way to become more hands-on without overcommitting.
Here’s how it works:
- Sell a put at your target strike (e.g. EUR 1,600)
- Buy a lower strike put (e.g. EUR 1,500) to limit downside
A: Conservative setup
- Premium received: EUR 197.50
- Max loss: EUR 802.50
- Breakeven: EUR 1,580.25
- Return on risk: ~24.6% in 17 days before fees, taxes, and transaction costs. Such high percentage figures reflect short timeframes and increased exposure to market volatility — losses may occur if the stock moves sharply lower.
- These figures are hypothetical, based on current option prices, and assume no change in market conditions. Actual results will vary and losses can exceed the premium received.
B: More premium, higher strike
- Premium received: EUR 330.00
- Max loss: EUR 670.00
- Breakeven: EUR 1,667.00
- Return on risk: ~49.3%, gross of fees and taxes. However, this scenario also carries a greater chance that the option will be tested or result in losses if Rheinmetall declines substantially.
- These figures are hypothetical, based on current option prices, and assume no change in market conditions. Actual results will vary and losses can exceed the premium received.
Final thoughts
Whether you're aiming to buy Rheinmetall shares at a discount or simply want to generate premium income in a defined-risk way, options offer a structured approach. Mini-options make sizing flexible. Earnings-related volatility boosts returns. And vertical spreads provide an added layer of protection for those not ready to commit to owning the stock.
This is about more than just trading — it’s about building confidence, managing outcomes, and being a smarter long-term investor
Author does not hold any position in Rheinmetall (RHMG:xetra) at the time of publication.
This content is marketing material and should not be regarded as investment advice. Trading financial instruments carries risks and historic performance is not a guarantee of future results.
The Author is permitted to wait at least 24 hours from the time of the publication before they trade the instruments themselves.
The instrument(s) referenced in this content may be issued by a partner, from whom Saxo receives promotional fees, payment or retrocessions. While Saxo may receive compensation from these partnerships, all content is created with the aim of providing clients with valuable information and options.
This content will not be changed or subject to review after publication.
The Author is permitted to wait at least 24 hours from the time of the publication before they trade the instruments themselves.
The instrument(s) referenced in this content may be issued by a partner, from whom Saxo receives promotional fees, payment or retrocessions. While Saxo may receive compensation from these partnerships, all content is created with the aim of providing clients with valuable information and options.
This content will not be changed or subject to review after publication.
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