Please help me understand a strategy: Selling Puts
I want to understand the risks involved with selling puts. I have some experience buying calls and puts but many of these were bad trades as I was speculating (I am not very good at that as I understand). I took an options trading course in college and then another offered by SMB Capital. Both talked about selling cash-secured pits and covered calls as alternatives to buying puts and calls. I would appreciate some advice on how to go about these strategies; I am looking to make small profits regularly and minimize risk.
What I understand so far: When selling puts, you anticipate that you will be assigned the 100 shares at expiration if the stock is trading at or below the strike price of the put option. You are also willing to own the stock at that price (the owning of the 100 shares can be seen as a risk or a secondary goal, please correct me if I am wrong). If you have the money, you’d be good (as opposed to selling naked puts)? I have googled to research risks involved and there’s “pin-risk” all over the place with words like “unlimited loss.” This is what I don’t understand and I would like some clarity. Is this a good strategy for making regular , albeit small profits and is the risk justified. Sorry if something I say/ask makes me come across as a novice (I am one). Thanks!