Trading Credit Spread is a good alternative to trading Naked Puts. The advantage of Credit Spread trades is that you know your MAX Possible Gain and Possible Loss.
Look to trade Credit Spreads options 16-60 days until expiration. Option premium decays faster when expiration is less than 60 days until expiration. (A more commonly discussed number is less than 56 days.)
To establish a (vertical) credit spread you SELL an OTM put and BUY a further OTM put (same applies to calls) on the same stock/expiration date. This gives you a net credit on the trade. The MAX Loss of the trade is the difference between the two strikes + the credit you received.
Based on capital tied up in a trade credit spreads have a higher return on average than a naked position. It is important to keep trading costs low since a credit spread requires two trades. There are discount brokers that charge around 1.50 per contract and may be best to use a discount broker to keep trading costs low.
After clicking Credit Spread Puts in the Setting Window (as show below) and clicking "Get Options" the results grid will show the results of the screener search.
I. Put Credit Spread
The screen shot below shows the results of a Put Credit Spread Search. The results grid shows combinations of the SELL and BUY options to establish the spread.
After clicking the Chain Icon from the grid above the Option Chain window will be displayed.
This is not your Typical Option Chain. What is displayed here are other Credit Spread options for the stock and expiration date selected.