My Go-To Cash Secured Put Screener for Consistent Income

0:06 Cash secured puts are one of my favorite income generating strategies. I made a few videos about it already, covering everything from setup and trade management to the risks you may face when selling them. And of course, I'm not alone. Tons of creators have covered the same topics like I have, like what underlying stocks to use, what platforms to trade on, and of course, each of their own techniques. And that got me thinking. I have a technique of my own.

0:34 It helps me limit my selections, identify some prime trade opportunities, and make sure that I get high quality growth oriented stocks if I get assigned all of it right from the get-go. So, I figured why not share it with you today? And that's exactly what I'll be doing today. In this video, I'm going to show you my ultimate cash secured put screener, which filters I use and why, and how Bar Charts extensive options and stock screening tools can help you find winning trades for consistent and reliable income. But first, let's cover the definitions. If you already know these, feel free to skip to the next chapter. But if you're new to options trading or you're looking for a refresher on cash secured puts, you're in the right place. A put option is a contract that gives the buyer the right but not the obligation to sell an underlying commodity or asset at a specified price known as the strike price on or before a specified date known as the expiration date. And a cash secured put is an option strategy from the seller side of the trade that involves well selling a put option on an underlying asset to earn a premium while setting aside enough capital to buy the shares should you get assigned. And since you're setting aside capital to potentially buy the stock, you'd of course want highquality stocks that have excellent growth potential. Now, cash secured puts are very different from naked puts because your downside risk is fully funded. With a naked put, you're relying on margin to cover you in the event of assignment. With a cash secured put, 100% of the cash is already set aside, so there's no surprise if assignment happens. Because of that, cash secured puts are generally considered a more conservative income strategy. You're not using leverage.

2:26 You're defining your risk upfront. And of course, you're combining income generation with a potential stock entry at a lower price than it is today. And that makes them especially attractive for long-term investors who want to build positions gradually while getting paid to wait. So, now that you know what a cash secured put is, you'll want to narrow your choices down to the best opportunities like stocks with strong fundamentals, healthy liquidity, and of course, option premiums that make the risk worthwhile. And that's exactly where Bar Charts option screener comes in. Bar Charts cash secured put screener can be found right here by clicking options at the top and then on naked put. Now, don't worry about the name.

3:11 It's all the same. The default screener includes some important details for your trade. All of the necessary information to help you decide. Now, today we get about 800 trades that offer a decent mix of risk and reward, but those are a lot of trades to sift through. Later, I'm going to show you how to customize the screen, but for now, let's stick with the default filters, and I'll quickly cover what everything means in the results. First is the asset's current trading price and expiration date, which is important context when trading options. The parentheses here indicate the days to expiration or DTE.

3:51 Next is the actual strike price. Now, with a cash secured put, you'll usually want to sell one with a strike price that's below the current trading price. If you want to generate income with a lesser chance of being assigned, you'll sell one at an even lower strike price. And I'll talk more about how to choose your strike price in a bit. The next column is moneyiness. Specifically, how far away the strike price is from the current price. Negative moneyiness means the trade is out of the money, which in this case, it just means that the strike price is lower than the underlying trading price. Positive moneyiness means that it's in the money and is at risk of assignment. Next is the bid column. This shows how much people are willing to pay for the specific put option. Next is the break even column and break even percentage which shows you the exact stock price and expiration where your short put neither makes nor loses any money. For short puts, it's simply the strike price less the bid or the credit that you actually receive. Next, options volume is just like stock volume, the amount of contracts that were traded in the last session. Then we have open interest which is the total number of open or outstanding active contracts that have not been settled or closed within the specified expiration period.

5:13 And you need to know these details in order to see if the option that you're interested in selling is liquid. Liquidity here can potentially mean the difference between entering or exiting a trade with a tight spread or of course getting stuck with a terrible price. You see this often in online marketplaces. People sell items that nobody else wants. So sellers are forced to lower the prices again and again until a buyer becomes interested. And that's exactly how illquid options trading works if there's no demand to buy your put option. You're going to have to lower your price to meet the bidder's preferred prices. But remember, options come with a limited time span, and with it comes a bit of extra value, which I'll cover in a bit. Regardless, running up against the clock, well, it can become a very big problem when you need to adjust or exit the position quickly, and you may end up selling for less or paying a higher premium than you expected. High volume means your order will get filled quickly without having to chase the price. and strong open interest tells you that there's plenty of other contract owners in play that might be willing to buy. The next column here shows delta. This is the options Greek that measures how much options premiums change based on every $1 change in the underlying price. Delta is shown as positive for short puts because the net to the seller increases as the underlying decreases. By the way, I made an entire video covering the Greeks right here. Feel free to check it out if you want the full deep dive. Now, aside from that, delta can also be used as a shorthand indicator of the chances that an option will expire in the money. For example, a 24 delta short put means the trade has a 24% chance of expiring in the money. Of course, it also means the option has a 76% chance of expiring out of the money, which is usually the goal in selling cash secured puts. I usually limit this to between 20 and 30 for a good balance between a higher success of it expiring unassigned and getting reasonable premiums. Next, we have return and annualized return. Return shows how much you earn relative to the capital that you set aside to cover your short put. Annualized return just extends the actual return to show you what it would look like over the next 12 months. Next, and this is likely where most traders are going to zoom into the most, and this is the profit probability column. This metric displays the likelihood of the underlying stock trading above the break even price at expiration. The higher the probability, the lower the chances of assignment.

8:01 Now, if you want to dive deeper into your trade details, you can click the P&L chart button right here or the chart icon beside the expiration date. Here you'll get everything that matters. The break evens, the Greeks, volatility, trend strength, and even the discount that you'll get if you get assigned. All of it is right there for you. And by the way, I covered how to use the P&L chart when selling cash secured puts in this video up here. But for now, let's cover a few key tabs. Greeks and expected moves. In the Greeks tab, you usually want to keep your eye on delta and theta. Now, I've already covered delta, but theta is equally important as it indicates how much the option will lose in value each passing day, assuming everything else stays the same, including the underlying security price.

8:48 This is also known as time decay. For long options, theta appears as a negative number because the option loses value every single day. For example, a theta of0.10 10 means the option drops about 10 cents per day if the underlying doesn't move. But for short options, theta is positive because the effect benefits the seller. The expected move tab shows the anticipated upper and lower price ranges for the stock's trading price based on 85% of at the money straddle premiums. When you're selling a short put, you'd usually want to set your strike price a bit below the lower range. That way you can decrease your chances of getting assigned. So now that we have the default screener ready and its results, what do we need to do to bring it up to the next level? Well, you'll start by clicking set filters.

9:36 Here you'll get all of our default filters and their values. Then you can do your own customization. Now, when selecting stocks to sell cash secured puts on, I prefer to limit my selection by adding the market cap filter and setting the values to above 3 billion. That way I avoid the small and micro cap companies and the volatility that comes with owning them. Then I add the implied volatility filter or IV. IV tells me how much an assets price is expected to move. IV is critical because it directly impacts options prices. The more the market expects a stock to move in either direction, the higher the options premium become regardless of the direction. I'll set the implied volatility filter to between 30 and 60%.

10:21 That's enough volatility to make it worthwhile to trade, but not so much as to put you at risk of massive price movements. Then I'll add in IV rank. This measures the current IV's position compared to the past year, or more specifically, where it sits in the range. For example, if IV is high right now compared to the past, IV rank will also be high, meaning premiums or options prices will also be higher than usual. So, I'll set IV rank to 30% and above. Then I'll scroll down to the security type filter and add in ETFs.

10:56 Then in the days to expiration or DTE filter, I'll change it to 30 to 45 days and add in weekly options to expand my search. And there we have it. We've got five results, much better than the 800 than we had before. But are we sure all these are ideal? I think I want to double check using another indicator because that's not all you can add to your ultimate screener. Bar charts option screener also integrates with the stock screener which means you can access all these stock filters for your option screener. The screener has a bunch of filters for technical analysis.

11:33 There's RSI, Ballinger bands, which of course I covered in my ultimate covered call screener, which you can check out up here, and others like MACD and even average true range. But when it comes to selling cash secured puts that are about a month out, why not use the short and medium-term buy, sell, or hold signal filter from Bar Chart's technical opinion feature? The results will fit in perfectly with this signal. Bar charts technical opinion is our own proprietary tool that looks at an underlying price history using 13 of the most popular indicators across short, medium, and long-term time frames to generate buy, sell, or hold signals. For each indicator, the system assigns a numeric value based on where the underlying current price sits relative to the indicator's opinion. We then consider all the values to get an overall percentage giving traders a good idea whether the balance of indicators points towards buying, selling or holding. We also show signal strength and signal direction. Strength tells us how powerful the signal is compared with its historical behavior and direction tells us whether a buy or sell signal is strengthening, weakening or steady. for hold signals. Direction indicates whether they're trending towards a buy or a sell, all of which make it highly useful when selling cash secured puts.

13:03 So, I'll add the opinions here and select buy ratings for both the short and medium terms. And if I run the screen now, I now get a shorter list of highquality companies with relatively high volatility, favorable technical indicators, and a high chance of these options expiring worthless. Now, any of these would probably make good trades, but since I follow Alphabet a lot, I'm more partial to it. Perhaps the $310 or $300 put strike, which is currently trading at around $316. So, let's break down the $300 put strike. According to the screener, you can sell the $300 strike cash secured put on Alphabet and collect about $6.30 a share or about $630 a contract. The option expires on February 6th, which is 32 days away, at least from the time of recording. The strike price is 5% out of the money, and you'll get around a 7% discount based on Google's current trading price if you get assigned. Now, if the stock trades above $300 by February 6, you get to keep the premium as profit and the option disappears from your account, and you're free from any other obligations.

14:12 But if it trades below $300 by February 6th, you'll be assigned. That means you'll be buying a 100 shares of Alphabet stock at $300 each regardless of its current trading price. Now, if we check the Greeks tab, this trade has a delta of 28, which is within my standard range of 20 to 30 and has a theta of 17.55. This means the option will lose roughly 18 cents every passing day, though this value will increase as expiration draws near. Now, if we jump over to the expected move tab, we can see that Alphabet is expected to trade between $293 and $340 by February 6th, at least based on the at the money straddle prices.

14:56 Ideally, you'd set a cash secured put strike below that $293 lower range. But in this case, I'll still take the trade because right now, Alphabet stock is very popular. It's up 70% over the last year and investors right now are very bullish on it. And not only that, its short and medium-term technical ratings are bullish. Of course, if you wanted to lean on a more conservative side, you could absolutely pick a strike that's around $290 or so. You just earn a little less premium. Then there's also the fact that you only want to sell cash secured puts on stocks that you'd actually like to own because if you do get assigned, well, you'll get Alphabet at a 7% discount relative to what the stock's trading for today. And lastly, we can see here on the expected move graph that Alphabet is releasing its earnings on February 3rd. That's 3 days before the option expires. Now, in a perfect world, you want to sell options that expire before earnings are released. That way, you can benefit from higher implied volatility, which directly translates to higher options premiums. So, 3 days is a bit of a sweet spot here. Now, even though cash secured puts are considered a more conservative option strategy, they're not risk-free.

16:15 The biggest risk here is straightforward. If the stock drops sharply below your strike price, you're still obligated to buy the shares at that higher strike, regardless of what the stock's current price is. That's why stock selection matters more than anything else. And this is also why I always stress selling puts on companies that you're genuinely comfortable owning for the long term. If the trade goes against you, at least you get something out of it, which is the stock. You're simply transitioning from an income trade into a stock position with a price that you chose. And lastly, choosing the correct days to expiration also matters here. Shorterdated options decay faster, which benefits the seller, but they also leave less time for the stock to recover if it makes a sudden move. Longer expirations offer more breathing room, but they tie up capital for longer.

17:11 That's why the 30 to 45 days to expiration range often strikes a good balance between premium, flexibility, and risk. Selling cash secured puts can be a good way to earn income while waiting to buy highquality stocks at a discount. Now, when done correctly, you're getting paid upfront. You're defining your risk, and you're putting yourself in a position to own companies that you already believe in. But this isn't a set it and forget it strategy. stock selection, strike price, expiration timing, risk management, all of that matters. If you rush the process or chase premiums on lowquality names, things can go south very quickly. But if you stay disciplined, focus on liquid stocks, and use tools like Bar Charts option screener to increase your chances of success, well, cash secured puts can be a powerful tool to add consistent income to your portfolio. But now I'm going to turn it over to you. What do you think of my screener? Or do you have your own cash secured put screener? Let me know your thoughts in the comments below. And while you're there, if you found the video helpful, don't forget to like and subscribe because it helps others find the video, it supports the channel, and it makes sure that you don't miss out on our next deep dive.

18:25 Well, that's it for me today. Thank you so much for watching and I'll see you next