Selling cash-secured puts is simple in theory: you get paid to wait for a stock you want to own at a discount. But in a volatile 2026 market, the difference between collecting consistent income and getting assigned at the top comes down to how you read the data.
In this quick video lesson, contributor Rick Orford explains how to read and interpret the data outputs from our Barchart Put Selling Screener, and how to optimize each one to find the highest probability income trades.
The "Safety Cushion": Moneyness
Moneyness refers to the relationship between your strike price and the underlying asset’s price. For income-focused sellers, always look for negative moneyness. This means your strike price is below the current market price, providing a structural buffer.
What to look for:
Strike comfortably below price, aligned with a level you’d be happy owning the stock. If you aren't happy owning the stock at that strike, don't sell the put.
Your Real Risk: Breakeven Price
In this strategy, Breakeven Price = Strike Price – Premium Collected.
This is your "line in the sand." Compare your breakeven to major 52-week support levels on the Trader’s Cheat Sheet. If your breakeven is above support, the risk is higher.
Why it matters:
If the stock stays above breakeven at expiration, the trade works. Always compare breakeven to recent support levels.
Liquidity is Your Exit Strategy: Volume & Open Interest
Never enter a trade with low volume or open interest in the single digits. Low liquidity can force bad fills and wide spreads. High volume and deep open interest ensure you can roll the position or exit early if the trade goes against you.
What to look for:
- Strong daily volume
- Open interest in the hundreds or thousands
- Tight bid/ask spread
Liquidity protects you if you need to adjust or exit.
The 70/30 Delta Rule
Delta isn't just a Greek; it’s a probability shortcut. Delta roughly equals the probability the option expires in-the-money.
- 0.30 delta = ~70% chance of expiring worthless.
- 0.20 delta = ~80% chance of expiring worthless.
Sweet spot:
Look for 20–30 delta to balance meaningful income with high-probability success.
Annualized Return vs. "The Trap"
Return shows how much income you’re generating relative to capital required. Annualized return helps compare trades across different expiration lengths.
The screener calculates the Annualized Return to help you compare a 7-day trade to a 45-day trade.
Warning:
If a return looks too good to be true (e.g., 80%+ annualized), the market is pricing in a massive move or an earnings gamble. Don't chase the yield; follow the probability.
Profit Probability
This shows the estimated chance the stock stays above breakeven at expiration.
- Higher probability = lower premium
- Lower probability = higher premium
Your job is to balance those two.
The Bottom Line
Used properly, Barchart’s put-selling screener can be a risk-management engine. It shows probability, liquidity, and defined risk — all in one place.
This powerful tool can turn cash-secured puts into a structured income strategy instead of a guessing game.
Watch the clip to see Rick walk through it step-by-step:
- Stream the full video lesson on cash-secured puts
- Start scanning for put-selling opportunities with Barchart's Option Screener
On the date of publication, Barchart Insights did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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