These are good questions, the sort of questions I expected when I started the thread.
1) Stock Selection - I'm not concerned with volatility per se, only the percentage of premium available to me. I want to collect at least 1%, or 40 cents on a $40 stock. I know I'm not going to keep that much on average, so I like to look for situations that offer around 2%. These will be harder and harder to find as the week progresses.
In most situations, this amount of premium will only be available on stocks with high IV. If you pick one with higher current IV than historical IV, you might collect a good premium with the expectation that the stock will return to its HV, speeding the decay to your advantage.
It's probably best, at least until you are very comfortable, to trade liquid stocks with daily volumes of several million shares. This keeps the bid/ask spread narrow. Many weeklies only allow order prices in 5 cent increments, it's probably best to avoid those also.
I have a basket of stocks that meet these requirements and I watch their price behavior every day. Jesse Livermore stressed the importance of what the tape was telling him in making his trading decisions. I interpret that to mean price action and volume, and I think you can often get a "feel" for how something might move based on what you've learned about its past behavior.
2) Timing - For me, timing is more art than science. I'm much more comfortable selling puts after a pullback, or if not a pullback then near the bottom of the short term range. Other approaches may work as well. I usually take a few positions early in the week, while keeping some powder dry for opportunities later in the week. It is surprising how many opportunities are available on Wednesday or Thursday, even sometimes on Friday.
3) When I have to carry through earnings, I accept the additional premium along with the additional risk. It's not unusual to get a 3% premium or even more. But if it tanks, you either have to wait longer to realize your gain or take the loss and move on.
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