It works as long as you understand you're selling the options below their expected value (EV). It's closer to EV than an option buyer, on average. But the price you get will always represent less reward for risk than my option pricers running on microwave-linked FPGAs a few feet from servers in New Jersey and Chicago can bid and offer.
If that works for you--if the benefits of income or whatever outweigh that theoretical cost--you can do it sensibly. If you're selling puts to enhance your returns, you're probably going to, at the very least, lose your accumulated gains at some point.
It works as long as you understand you're selling the options below their expected value (EV). It's closer to EV than an option buyer, on average. But the price you get will always represent less reward for risk than my option pricers running on microwave-linked FPGAs a few feet from servers in New Jersey and Chicago can bid and offer.
If that works for you--if the benefits of income or whatever outweigh that theoretical cost--you can do it sensibly. If you're selling puts to enhance your returns, you're probably going to, at the very least, lose your accumulated gains at some point.