Thank you, and how do the benefits compare for an account without margin availability, e.g., a Roth?
In an IRA the only puts that can be sold are cash secured. The BPS enables some of the leverage that people are using margin for. The post linked above has a more detailed example, and was worked specifically for an IRA. I'm doing these actively in both a Roth and a rollover IRA, exactly as described here.
I do have an idea for folks to consider (still NOT-ADVICE
). For those that are already comfortable with cash secured puts, you can get a dynamic that is very close to a cash secured put using a very w i d e spread. So something like a -700p/+500p (I usually shorthand these as 500/700 spreads). That spread only needs $20k as backing (vs the $70k of the cash secured put) and will behave a lot like a cash secured put, at least north of say $650ish or so. So you get 3.5 of these BPS for each 1 of the csp you'd have sold previously, while also getting something that behaves a lot like that csp. Maybe do 2 of these (don't use all of the leverage) your first time out.
A related idea - start distant and start small. If a position goes sideways keep the punishment lightweight but still educational. So don't make it so small that you don't pay attention
My own experience has been that its quite reasonable to get paid to learn how to do this.
Though opportunity cost - if you're trading these BPS and the share price goes on a tear, you could easily earn significantly less than you'd earn by being in shares. Broadly speaking, selling options is going to do great in a sideways market and lag when the share price is going somewhere with purpose.
Such as last year when the shares went up so far, so fast. I made a lot of money selling options last year, but not nearly as much as simply buy and hold would have done. Then again buy and hold wouldn't have created this new skill I have for generating an income from my TSLA share ownership, and that's way more valuable to me.