How I Find Stocks To Sell Put Options On (In 5 Minutes)

Okay, if you're still struggling to find stocks to sell put options on, then in this video I'm going to show you one of my favorite scanners to use where you can put in your parameters and you could find stocks to sell put options on. If you know anything about us here at The Smart Option Seller, we're all about selling naked put options and cash secured put options as well. So, sit back. I'm going to show you what we do, how we do it, what scanner to use, and then we're going to look at some examples. All right, so let's just jump right in. All right, everyone. Lee Lowell here from smartoptionseller.com. So, in this video and and it's a continuation of a of an earlier video I made a couple weeks ago. We are going to be looking at Option Samurai. Okay, Option Samurai is a great tool, great software to use to scan for stocks to sell put options on. Now, if you want um the link for Option Samurai down in the description, I put the link. You can get 14 days free to use it, try it out, see what you like. And if you use the link below, they know that you're coming from me. All right, so let's just jump in right here to uh Option Samurai and take a look how you can find stocks to sell put options on. Now, Option Samurai is more than just a scanner for selling put options on. You can use it for anything. So, when you open up Option Samurai, you go to the the website and and you're going to come up to um a screen that looks like this. And you can search for anything. And you have predefined scans here which you can click on any one of these things right here and it'll bring up their predefined scans. Now, what we like to do obviously is sell put options. So, we're going to click on naked puts right here and it comes up defaults to these five pre- pre-made scans that they have for you. And once you get into one of those, you can tweak the the parameters that I'm going to show you how that all is. but if you want to choose one of these, I'm just going to pick one of these. This one right here, the high probability naked puts, 85% probability of of being worthless on good companies. So, >> [clears throat] >> when you sell put options, you either there to just collect the premium or you're there because you want to take ownership of the stocks. For those of you that may not know, selling put options is a great way to earn income. When you sell an option, you're going to get money up front, but specifically when you sell a put option, what you're doing is basically you're you're agreeing to sometime in the future to potentially buy the stock of your choice at a price of your choice, which is typically a price lower than where the stock currently trades. So, if a stock's at 100 and you sell a 70 strike put option, you're basically agreeing to potentially buy shares of that stock at $70 a share while it's currently at 100. And you're going to get paid money up front to do that. And the only way that you would be able to buy shares at $70 is if the stock actually falls from 100 to 70 by the expiration date, which could be a a small probability. So, anyway, what you want to do is you want to sell put options either to collect the cash and or to potentially buy shares of the stock, but you want to make sure it it's a good company and that's how it works. Now, if you want a full-blown synopsis of how selling put options works, also down in the description I have a link to my free ebook. Yes, it's free. Put selling basics all about what put selling is and and so you can understand it a bit more. So, check check the link down there. All right, so we're going to click in here, click on this, and it's going to bring up the scan right here, and let me move myself over a little bit. It's going to scan the high probability naked puts 85% of of expiring worthless. So, that's what you want to happen. If you're just there to collect the money, you want the option to expire worthless. So, 85% probability of that happening is pretty high. Now, what we're going to do is on the left-hand side here, these are the inputs, and then it's going to output over here the stocks that it found based on this criteria over here. Now, it's only one page, so there's probably 1 2 3 4 5 6 7 8 9 10 stocks that it's found. So, that's good. It whittled it down pretty good. And I'm going to explain some of the inputs here, and I'm going to actually tweak some of these for what what I would look for for for certain parameters, okay? And And across the top here, you can see it's got all the the headings, okay? And you can you can uh move these, so certain headings have are more important to you, and I'll show you how you do that. So, let's look at the filters here that it has already defaulted in. And if you want to click on add filters here, if you want to add some or you just want to see what's available, you click on add filters, and it has all these things here, okay? So, it's got descriptive data, technical, fundamental, and down further below, it has some of the options data that you can put in, the Greeks, and certain option >> [snorts] >> ideas that you may want. But, I'm going to show you some of the ones that I think are the most important, okay? Now, over here, as I said, these are the descriptive These are the filters that it has already put in. What What I want to look for is one of the most important things is that when you're selling put options, in my opinion, is that you want to sell a put option where the earnings date comes after the expiration, okay? An earnings announcement by a company can can make the stock move jump higher or lower on you, giving you an unexpected result. So, in order to sell put options more safely, you want the earnings date, right here, to come after expiration. It's already defaulted in. It's already filtered in there. Dividend date, I don't really care about. Dividend doesn't matter so much for me, so I'm going to hit the X here, and we're just going to get rid of that. Okay, so we don't care about what the earnings date it I mean the dividend date. Fundamental data, not so much important to me. I'm more of a technical guy, but so what they do is what what Option Samurai has, they have these stock scores, stock growth, stock technical. And when you come over here, this is the if you hover your mouse over the question mark, it shows you they got a fundamental, a growth, and a technical score. 1 to 10, 10 being the best as far as bullishness goes. I don't really care about that so much, so I'm going to get rid of these. And and then once you change a filter over here, you want to click on run scan, so it'll rescan um based on some of these parameters. Now, options volume, options data, I don't care about the options volume. Options volume and open interest doesn't matter so much to me. Whether whether uh contracts have ever traded before doesn't matter to me. Open interest could be zero, and I don't I couldn't care less if there if there's been no um options data or options volume already out there. Okay, so let's keep going through the list here. Uh IV rank, that's that's a pretty important. IV rank tells you IV stands for implied volatility. Now, the implied volatility uh determines how expensive or how cheap a option price can be um when you're looking at its current level, its current price. When implied volatility is high, option prices are higher as well. And when implied volatility is low, option prices are lower. So, we want the IV rank, and the IV rank tells you where the current volatility of that stock is compared to itself over the last year. So, we want something a little bit on the higher side because that will make options more expensive and when you sell that option, you'll get more money in your pocket. So, to change a a filter here, all you have to do is click on it and it'll bring up in this case the slider. So, let's move this thing to at least 60%, okay? And, you know, we got to get it right there. Click on the check mark and then run scan again. It'll re-filter the stocks that it's found. Moneyness option data. So, moneyness is how much above or below the strike price is the according to where the stock is. So, we want an out of the money strike, something below the current price of the stock because that's where we're selling out of the money put. So, you can click on custom here and it'll give you a drop down of choices or you click on the advanced, it already has this this is minus 26% to minus 1%. So, that means what they filter out is stocks at least 26 from 1 to 26% below the current price of the stock. Now, what I'm going to do here is I'm just going to change this to um 15% below the stock price. Click this. Click this. So, it'll re-dunce redo the scan. So, actually you can see now there's a few less stocks here. Probability of expiring worthless, we can keep that in there 85 to 100%. The higher the number, the the higher the probability the option is going to expire worthless and that's what you want. Bid-ask spread, I don't really care about this. Um days to expiration. So, this is this is another big thing depending on what your time frame is. So, what we're going to do is we're going to put this down to um medium 30 to 60 days to expiration, but this earnings thing is still in play here, okay? So, you can see that it's actually dropped stocks down even more. And then the spread specific, I don't care about this. What we want is the Let's see. We want the Yeah, let's go back to the filters. I want to add in a option bid. Where's my bid price for the option? Uh give me a second here. Let's take a look at this. I want the bid ask spread. Okay, um bid. Let's try this. Okay. So, we want the bid to be at least um above 50 cents credit. Let's see what that gives us. Okay, so it's going to knock it down a little bit more. And the returns, I don't really care about the return so much. So, we're going to leave that out here. Let's get rid of that. Rerun this and see where we are. Okay, so we got some stocks here. Uh we got a bunch of stocks here. So, it's it's not it actually now now we have some more stocks. So, let's just go over what we're looking at here. Earnings date comes after the expiration. The IV rank we want to be pretty high. The moneyness 15% below the current price of the stock. Expiring worthless. So, then once you're done with that, you can look at your your columns here. Now, let's rank this the IV rank. And we want this to be from high to low. Let's go this way. Okay. So, IV rank. So, Novartis, NBS is a symbol, has the IV rank. That means the implied volatility is almost at the top of its range from the last year. That means the options are expensive. Or they're uh priced higher, so you get more money for them than you would have had you sold this at some other time over the last year. Probability of expiring worthless is over 92% and the bid price on this thing is at least 60 cents per contract and it's looking at So, here's Novartis. It's current price is $153.80. It's looking at the 130 strike. Okay, so that's $23 below the current price of the stock. You can see right here 15.48% below the stock price. Um Delek Holdings, if that's how you pronounce it, DK, is 30% below the current stock price. Has a 90% IV rank. So, that one's pretty high, too, and it's got a bid price of that option of at least 50 cents. Now, what you also want to do So, I might add some other filters here and I As I said, I'm not really a fundamental guy, but we want stocks typically to be more of an uptrend. You're going to look at the the stock chart as well, but let's go to this fundamental data and see we want earnings per share growth over the past 5 years. Uh you definitely want a company that's growing their earnings. So, we have that in here and we want the earnings to at least be positive over the last 5 years. Okay. So, let's rerun this scan. Okay, so now it knocked it back down a little bit, but we still have we still have Novartis and DK. So, we're going to look at those two specifically. At that point, what you want to do is got to bring up a chart here and let's type in Novartis. Okay, so this is a 2-year look back. This is my chart here. The RSI down here. RSI is in mid-range, so that means it's not really overbought or oversold, but you can see over the last few years it's gone up. Now, if you do a little bit of technical analysis, you know that this kind of looks like what's called an ascending triangle here, okay, where the stock prices are starting going up. It's got a cap here and but it's working its way higher and higher. If it can blow through this this resistance around 160, the stock's going to go. Okay, the stock should continue on an uptrend. But this stock is in an uptrend, which is good. Earnings per share. The other thing that we could probably put in the in the um data here is let's add a filter of a performance for the year, performance to date. Let's put that in performance to date, and we want a Where's my performance to date? At least a positive. Let's say how about up more than 5 or 10%. Let's Let's go at least Let's go up 10% and let's see what it gives us. Let's run the scan again. All right, so same companies, Novartis and Delek is still on top. Amgen is here, but again, these two have the high IV rank, and so we're going to concentrate on those. So Novartis has got a good uptrend. Let's put in DK. Also in a good uptrend starting from, you know, April of 2025 going up up up. This one This one's pretty high above the moving averages. Um not so much overbought on the RSI, but I'm looking I like this Novartis chart a little bit better. Okay. So, if you want to concentrate on selling put options on Novartis, that's how you can filter it out. Now, what obviously what you want to do, you can go back to um Option Samurai and click on Just click on it, and what it'll It'll come up down here. It'll bring up the P&L profile when you sell a put option. We can look at They have also have a stock chart here, which you can look at. And if you just kind of scroll your mouse, it'll bring up uh at least a one-year chart. And it'll give you It'll show you the next earning date is October 27th, which is after the expiration date of October 16th, so that's good. The strategy shows you the options. Um this shows you the volatility, implied versus historical. And we know the implied volatility is um high because IV rank, okay? The other thing, lastly, what you want to do is you probably want to check your option chain to just, you know, look at some of the option prices. And what we can do is, let me see if I have something pulled up here for um Novartis. I can look at the option chain here for Novartis. Okay, I have this pulled up. So, if we're looking at this October 16th date, the bid ask is right here. We wanted to concentrate on what was it the What was it the 130 puts? Okay, 130 puts put options on the right side of the chain here. So, the 130 puts, 60 cent bid at 95 cent offer. You probably want to sell something in between, maybe 75 cents. So, if you sell this Novartis 130 put for 75 cents, only an example, not a live recommendation, do not take this as me telling you to sell put options on Novartis, example only. So, if you sell this thing for 75 cents, you'll get $75 in your pocket. Now you're on the hook to potentially buy Novartis, 100 shares of Novartis for $130 a share. If we go back to the chart here, $130 is all the way down here. Okay, here's 130. So, you have all this cushion, right? That was over 20% cushion. Um Oh, was it? Uh let's see. No, not how much What was the cushion here? Let me look at this real quick. Uh 15 and a half I'm about 15 and a half percent cushion, okay? So, go back to the stock. So, here you go. 130, you put that in, you sell that put option at the 130 strike, you're going to get yourself maybe 75 bucks. And that's how you search for stocks to sell put options on. We can go back to the Option Samurai. Now, if you want to go back to the all scans again, naked put, these are the others that you can look at, but no matter which one you choose, you can always always change the parameters. Now, this one is a scan on out of the money So, these are already out of the money puts with a high probability on stocks that are oversold. So, some of these stocks are oversold based on the RSI indicator, and these are the These are the the indicators that they have in here or the filters, I should say. Okay, so they have an earnings date still after expiration. They've actually put in the their RSI indicator. The 14-day RSI indicator is below 30 for at least 1 day. And IV rank, these are all pretty low, okay? Uh you know, 9%, that's something that we don't That's very low for IV rank. So, if we I'm going to see what they have. Do they don't don't even have IV rank? Oh, yes, they do right here. So, they have any. So, if we change this to say at least 50%, let's see what happens. We run this. Okay, so there's no no stocks that even came up with that. Okay, so you do want to play around with the the filters here. Choose whatever you like, or you can use the one that I just created. You can go back and take a screenshot of that. Option Samurai, great way to potentially find stocks to sell put options on. Once again, down in the description, the link for Option Samurai. You can try it out for 14 days. Also, the link down below for my free ebook on how to sell put options, what put selling's all about. Take a look there. All right, if you found value in this video, please please give me a thumbs up. Give me a like. Leave me a comment. Send me an email. I'll always answer email as long as it's uh you know, for specific options trading questions. All right. Uh on the screen here, I'm going to put another video all about Put Song. You can you can watch that and learn what it's about. And that's all for me. I'll see everyone in the next one. This is Lee Lowell signing off.