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.