Selling options can be a great way to capitalize on a choppy market, hedge against long term positions, or simply take advantage of theta decay on high conviction plays. Here i will give an introduction to selling puts, and hopefully give you a better idea of how they work. The first you need to be able to sell options is collateral. To sell a put (cash-secured put) you need to have the full amount of cash in your account equivalent to the cost of buying the shares of the asset at the strike price of the put. As we know, each contract represents 100 shares of the underlying asset, so if you are selling a put on a stock worth $50 per share at a strike price of $40, then you need $40 x 100 = $4000 in collateral to place the trade. When selling a put option, there are two possible outcomes: 1. If the price of the asset stays above the strike price, the put expires worthless, and you collect the entire premium form, the contract. Say we paid a premium of $5 to sell the aforementioned put. If the put expires worthless, we collect the entire $5 premium, or $500 total. 2. If the price of the asset falls below the strike price, you will be assigned 100 shares at the strike price. In our example, this is why $4000 in collateral is needed to open the position. In this cashew, though, you still collect the premium from the expired contract, so it is as if you bought the shares at a discount for $4000 - $500 (the premium) = $3500 When to use cash-secured puts If you wish to buy an asset at a lower cost than it is currently at. With selling puts, it is like getting paid a premium while you wait for price to fall to an area you are comfortable buying at. Just like other strategies involving selling options, since time is on your side, selling puts can allow you to capitalize on flat price action. Income strategies: if you don't mind owning the stock, selling puts can be a good way to generate premium on a stock you are bullish on. In general, selling puts is good for those with higher buying power that wish to generate premium on stable, or high conviction stocks. Investors can generate a known amount of money on a stock while it sits flat, or goes up. ONE LONG-TERM PROFITABLE STRATEGY One way that has been profitable over time in the past, if selling 0dte puts on the major indexes. These puts have an obviously very quick turnaround, and due to the market historically going up, if you consistently sold puts in the past, you would be profitable. Its like investing in the indexes, but with higher liquidity in terms of trading capital, and the possibility to lever better than you can in longs.