Rick, I would look for OTM further out than 3%. IF you go with 1% you may end up getting assigned unless the stock is trading flat. If the POA is less than 30% you might be okay. The strategy is really to allow the put to expire worthless.

I have open naked put trades pending for the options below.

AMED: Moved up so no fill yet.
SKX: Pulled back waiting for a fill.
GCI: I sold puts on that one last week and they are all in the green. The premium is too low today so I did not place any other trades.

Rick,

I will answer your question based on some recent trades. About a month ago another member of the site has been working on a strategy that we tested real-time. It looked for options that were around 15% OTM, ignored POA, and returned at least 3-4% and were about 1 month out.

We traded many and many worked out great. One trade that did not was CECO. All was well until news hit the education sector about education companies charging high prices for tuition. Over the next week the stock tanked and the puts were deep  the red.  When the the news came out I dumped the puts (at a small loss) when the stock rallied after a the initial pull-back. Other folks stuck the puts and had to roll these out or take a loss.

The search feature is a data mining tool to build a prospect list. The initial post I listed the features I used with good results for 1 to two weeks out of expiration with the intention to find puts that would expire worthless. The result list may show (for example) 50 stocks but it does not mean all 50 are good naked put trades.  Taking this list you need to look at support, resistance, analysts reports, and so on helps to narrow the search.   When you run any screen the results can change day by day based on implied volatility and many other factors that impact option prices.

Thanks,
Patrick

Rick,

I would like it if folks shared what they have found to be profitable, but just like the community watchlist, people that are willing will share, others will not.

The purpose of the option screener is to build a prospect list, no different than using a stock screener on yahoo, msn, or in a brokerage account.  If you know that you want to sell covered calls on stocks and you want a 5% return over 30 days then set the screener to Calls, 5% ROI, and set the Expiration Date out 30 days.

Once you get this prospect list then there are many factors, as mentioned earlier, one has to consider. Is the stock trending up, down, is there bad news, what are the earnings, and so forth.

I mention this because the settings on the search are so flexible that someone can post the parameters they used, but then based on their own research (technical analysis of the stock, fundenemtal...) and risk tolerance they picked stock A where someone else may have picked stock B.

In summary, what I am trying to say is look at the screener as a way to build a prospect list, then take the next step of determine what looks good based on technical analysis of the stock, fundamental analysis, and so forth.

It is not fully possible to just back-test the parameters of the screener. It would have to extend to the underlying stock, its earnings, news, and technical support/other technical factors.

Thanks,
Patrick