Writing puts seems like a free money, if you think about it as possibly owning your favorite stock at a discount in worst case scenario.
Problem with this is that sometimes the price might dip for irrational reasons(let's call it technical reasons), which is the good scenario.
However, sometimes price might dip because of fundamental reasons(let's say company announces that their CFO has misstated results for last 5 quarters).
Even worse is writing Covered Calls without any thought. There was that guy on Reddit who sold Covered Calls on his McDonalds stock. It worked great for a few months, collecting premiums while the stock stayed stagnant. Then the stock dipped in such a way that writing Covered Calls at the original strike price was not really worth it anymore, while writing at a lower price than purchase price was even worse. The protective puts(which he did not have) would not have been triggered either as the dip was not low enough.
Yes, what sireat is saying is somewhat true. However with options I believe you have a greater flexibility and more opportunity to make gains when compared to trading stock on its own.
With this strategy you have the chance to protect your capital (by buying protective puts) while earning an income (write premium) and capital gains (in the money Covered Call strikes and dividends). You can make money with this strategy when the market is going straight up, somewhat up, and sideways. You can protect your capital when the market goes somewhat down, but you will loose money if the market crashes.
Frankly there is much I've not said when it comes to trading that is do or die. Money management, position sizing, managing positions, emotional management, fundamental/technical/sentimental analysis just to name a few areas a successful trader should master or at the very least have a working knowledge of.
The volatility skew on equities is generally downward sloping as a function of strike (because investors are scared of crashes), meaning that the puts you buy to protect your capital will be more expensive than the calls you are selling to earn the premium - if you want the same amount of downside protection as you have upside risk, you'll actually bleed cash with this strategy. The only solution is to buy less downside protection that upside risk, which leaves you vulnerable to a market crash, whilst at the same time capping your upside - exactly the situation you don't want to be in!
If the price moves against you (down if you have written a put, up if you have written a call) then you never get the chance to buy the options back at a profit. You might get a bit of theta decay, but equally any large moves will tend to kill you on the gamma and vega.
As I said in another comment, writing options covered or not is basically a bet against volatility.
But you don't own our favorite stock at a discount. If you've written a put on AAPL struck at $450, and it drops to $400, you are forced to buy it at $450 - you end up buying it at a premium! What's worse, even if you think the stock is too cheap at $400, you have a $50 hole to climb out of before you can start realizing any of that gain.
Problem with this is that sometimes the price might dip for irrational reasons(let's call it technical reasons), which is the good scenario.
However, sometimes price might dip because of fundamental reasons(let's say company announces that their CFO has misstated results for last 5 quarters).
Even worse is writing Covered Calls without any thought. There was that guy on Reddit who sold Covered Calls on his McDonalds stock. It worked great for a few months, collecting premiums while the stock stayed stagnant. Then the stock dipped in such a way that writing Covered Calls at the original strike price was not really worth it anymore, while writing at a lower price than purchase price was even worse. The protective puts(which he did not have) would not have been triggered either as the dip was not low enough.
So again, there is no free lunch.