How to Find the Best Stocks for This Cash-Generating Options Strategy

OPTIONS TRADING open book on table by One Photo via Shutterstock

Barchart Insights

Thu, February 19, 2026 at 9:48 PM GMT+9 3 min read

Most traders lose money selling options for one simple reason: They sell premium blindly.

High implied volatility looks attractive. Big premiums feel exciting. But without structure and filtering, volatility alone can expose you to unnecessary risk.

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In Rick Orford’s latest video lesson, he walks through a disciplined, repeatable framework for selling cash-secured puts using implied volatility — and explains how to refine those trades using Barchart’s proprietary Technical Opinion tool.

This isn’t about chasing yield. It’s about stacking probability.

Why Implied Volatility Matters

Implied Volatility (IV) tells you how much the market expects a stock to move.

Higher IV → Higher premiums.

Lower IV → Smaller income potential.

But high IV can also mean:

Large price swings

Event-driven risk

Microcap instability

That’s why Rick’s approach filters for moderate volatility, not extreme. He sets filters for IV between 30% and 60%. That’s enough to generate a meaningful premium — without stepping into dangerous territory.

The IV Rank Advantage

Looking at IV out of context isn’t enough. That’s where IV Rank comes in.

IV Rank measures where current volatility stacks up compared to the past year’s worth of readings.

For example:

If IV is high relative to history → IV Rank is high

If IV is low relative to history → IV Rank is low

Rick’s preferred setting for IV Rank is ≥ 30%. This ensures you’re selling premium when volatility is elevated relative to its norm — not during quiet periods. That’s because selling premium works best when volatility contracts after you enter.

The Market Cap Filter: Avoiding Small-Cap Chaos

Along with volatility filters, Rick also eliminates unnecessary risk by removing microcaps from the equation.

He filters for market cap above $3 billion, which avoids:

Thin liquidity

Wide bid/ask spreads

Extreme price swings common in small caps

Selling puts means you may eventually own the stock. You want to buy quality companies — not lottery tickets.

The 30–45 Day Sweet Spot

Rick narrows his expiration window to focus on 30 to 45 days to expiration (DTE).

Why? Because that’s when:

Theta decay accelerates

Premium erosion works in your favor

Risk remains manageable

 






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He also includes weekly options in his search to optimize flexibility.

The result? Rick’s pool of potential stocks is whittled down from over 800 candidates… to 5 structured, high-quality setups.

The Edge Most Traders Miss: Technical Confirmation

Here’s where the strategy becomes powerful. Barchart’s Option Screener integrates directly with its Stock Screener.

That means you can layer:

RSI

MACD

Bollinger Bands

Average True Range

Proprietary Technical Opinion ratings

Rick uses Barchart’s Technical Opinion feature, which evaluates 13 indicators across short, medium, and long-term timeframes.

He filters for both Short-term Buy and Medium-term Buy.

Why does this matter? Because when selling cash-secured puts, you want:

A stock likely to stabilize or rise

Momentum on your side

Higher probability of the option expiring worthless

This layer reduces randomness dramatically.

Why This Strategy Works

Cash-secured puts are a conservative strategy at heart, because:

Risk is fully funded

No leverage is required

Assignment is acceptable

You’re getting paid to potentially buy stock at a discount

When combined with smart volatility filtering, it becomes a disciplined income engine. Not flashy, and not aggressive – but consistent.

Watch this quick screener video:

Explore Rick’s full lesson on screening for cash-secured put stocks

_ 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. This article was originally published on Barchart.com _

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