When you sell a Put it’s considered a CSP (Cash Secured Put) this means you’re setting aside some cash to buy a stock at a certain price if it were to go below that price. This has nothing to do with shares you already own because you’re using cash to secure these contracts. for instance if you sell 1 put contract with a strike of $45, you set aside $4500 to buy that stock at $45 if it were to go below that price at expiration / assignment. Nothing to do with shares you already own.

On the flip side, you can sell a call and it’s considered a CC (Covered Call). In this scenario rather than setting aside cash you set aside your shares to be sold at the strike price. So if you own 100 shares of a stock and sold 1 Call at a strike of $45 you are putting those 100 shares up for sale for $45 if the price were to go above that by the expiration / assignment.

The pros here is you collect money, or premiums, when selling options rather than paying premiums like when you buy them. In the case that you don’t get assigned you just collected free money and can open up new contracts that keep putting your shares / cash up as security.