"newbies should stick to selling puts on dips". Unless I'm am missing something, this is the absolute worst advice one could give to a "newbie", (one who has little experience in market in general and certainly little to none in options).
Case in point: There was a poster here a few days ago that announced that he had sold 10 Jan 2020 and rued the fact that he had not sold 100. He did not mention what strike price he used. I asked this poster if he had sold these puts to open a position or close a position. I got no response, so I'm going to assume that he sold to open. As an example, let's say he sold the Jan 2020 $300 puts. For the purposes of this discussion, it doesn't really matter how much he sold them for. What really matters is this: He has sold someone the right to put 1000 shares of Tesla to him at anytime between now and 3rd Friday of Jan 2020. So if, for whatever reason, Tesla tanks below $300, the owner of the puts can exercise his right to sell 1000 shares to the poster. The poster will have to come up with $300,000. If the poster had actually sold what he wished he had sold, he would have to come up with $3,000,000. (remember, I chose strike of 300 for illustrative purposes) One could assume any other strike, but the message is the same. Taking this type of risk and losing could change someone's life in a very meaningful and painful way. JMO
