DaveJ, selling puts is a great way to get into a trade and is the only reason why I would sell naked puts or recommend to trade them.

example for those that need a lesson.
Lets say you do your homework on Telstra and you think it is the best company in the market. Say you think it is worth no more than $4.50

You can buy Telstra 2 ways. Put in a limit order to buy 1000 Telstra shares and wait and wait till you are filled. Once Telstra hits $4.50 you will get filled. This could take a few months.

Or you could sell 1 naked $4.50 Jan 08 put. You get a credit while you wait for Telstra to hit your $4.50 strike.

If you are scared of the downside you can buy a $4.00 put for protection under neath your short $4.50 put.

Options are a great tool when they are liquid LOL.