I have been selling puts for a long time and make great money at it. 1% per week selling weekly options is not unreasonable assuming you are using close to 100% of your margin. Risk management is key as you don't want to get caught holding a dog for a long time if you take the stock. However with every strategy there are adjustments to the trade one can make or do what I do and simply spread out your risk amongst 10-15 positions. Always avoid large concentrated positions.
One can also apply stop losses as well but base those stop losses on the underlying stock, not the option. If I get put the stock, I want the stock to be near the strike price I sold. Otherwise, I would not take the stock. But if you assume the stock and it is trading near the strike you sold, simply sell an atm covered call against it.
Another risk management technique I use when selling weeklies, is to start by selling puts that are 2 standard deviations otm.
In addition, I like to use the 52 week moving average as my support line. In other words, sell puts against stocks that are trading above it. The rational being that investors are less likely to dump a stock that has long term capital gains that are beginning to be realized. Therefore, i look for stocks that are just breaking above the 52 sma and beginning a bullish trend or simply trading in a neutral fashion around the sma.
YTD, I'm up 20%, but again I use leverage to juice my naked yields (premium collected / cash outlay if assigned). My average naked yield is around 0.4% per week, but with leverage average 1 to 1.5% per week. Roughly 95% of my trades expire worthless. roughly 2% of the trades may result in taking losses and the other 3% result in being assigned. But the beautiful thing about being assigned near the strike I originally sold allows me to turn around and sell an atm call which usually affords me a 2-3% naked yield. Usually those assigned positions return to cash the next week, because I have huge 52 week sma support underneath it.
Keys to successfully trading this strategy are diversify amongst 10+ positions. Sell otm puts that are two standard deviations away, close out positions if stock goes below 52 week sma. And assume positions and sell atm cc if assigned near your original strike sold.