FITools · Options selling

The quiet, methodical way to generate portfolio income.

Most option tools sort by yield and stop there. FITools grades the whole trade: the business behind the contract, the cushion beneath the strike, and whether the premium actually pays you for the risk.

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Research software for established, self-directed investors. Not trade signals. Not automated execution.

JNJ Johnson & Johnson

Covered call · Aug 21 expiry · $265 strike · spot $253.04

A92 / 100
  • Income edge 30% 80
  • Assignment safety 20% 95
  • Execution liquidity 20% 100
  • Volatility quality 20% 95
  • Time commitment 10% 100

Flags clear. No earnings before expiration.

If assigned: sell at $265, a price you chose in advance

Bottom line: a high-quality company paying a modest 5.3% annualized yield with no earnings landmines ahead. A textbook covered call.

Market data · Jul 22, 2026 close · illustrative evaluation, not a recommendation

A disciplined framework

The highest premium is rarely the whole answer.

An option chain makes it easy to sort by yield. It does not tell you whether that yield adequately compensates you for the business, the strike, the spread, the assignment risk, or the time your capital will be committed.

FITools narrows the underlying companies, evaluates eligible contracts, and assigns each one a 0 to 100 score and an A to F grade. The result is not a trade signal. It is a more disciplined way to decide which opportunities deserve further research, and which ones do not.

Understand covered calls

You own 100 shares and sell someone the right to buy them at a set price by a set date. The premium is yours to keep either way. What you have sold is the outcome above the strike. What you have kept is everything below your cost basis. That trade-off is the whole strategy.

Understand cash-secured puts

You reserve enough cash to buy 100 shares at a strike you choose, and you are paid a premium for the commitment. If the stock stays above the strike, you keep the premium and the cash. If it falls through, you buy at the strike, which is only good news if you wanted the stock at that price before the premium entered the conversation.

What makes an option worth selling?

A premium that pays you fairly for a risk you would accept anyway: a business you would own, a strike you chose in advance, a window with no known landmines, and a yield that beats what Treasuries pay for doing nothing. Most contracts fail at least one of those tests. That is not a flaw in the market. It is the reason to screen.

The screener

Every candidate. One screen. One scale.

Covered calls on stock you hold. Cash-secured puts on cash you have reserved. FITools evaluates both on the same 0 to 100 scale, across every ticker, expiration, and strike that passes your filters, and surfaces the strongest contract for each company that clears your screen.

The alternative is a dozen option chains, three browser tabs per ticker, and a spreadsheet you maintain by hand.

Both strategies 25–60 days to expiry Open interest ≥ 500 Spread ≤ 5%

Screener results · grouped by company

  • JNJ $265 Call · Aug 21 A92 5.3%annualized

    +4 alternatives

  • MSFT $410 Call · Aug 21 B87 15.2%annualized

    +6 alternatives

  • XOM $148 Put · Aug 21 B83 12.9%annualized

    +3 alternatives

Illustrative example, not a recommendation.

The four checks

Every contract runs the same gauntlet. Fundamentals first. Each check exists because of a specific way option sellers talk themselves into trouble. The pipeline is literal: screen the company, screen the contract, score what survives, flag what the score can't say.

The company screen

An option strategy cannot fix a bad stock.

The trap

Selling cash-secured puts on a dying business because the 4% monthly yield looks irresistible.

The FITools solution

Before FITools evaluates a single strike price or expiration date, the company has to clear your fundamental screen: balance sheet health, cash flows, margins, valuation. A fragile business never reaches the grader, no matter how attractive the premium looks.

Default safety filters: large companies (a $10B market cap or more), a sane price tag, healthy profitability, and low debt.

Company screen · 33 configurable measures + sector and ETF selection · defaults on: mkt cap ≥ $10B · P/E ≤ 35 · ROE ≥ 10% · D/E ≤ 2

Four measures on by default. Twenty-nine more when your process wants them.

PTON Peloton Interactive

Cash-secured put · Aug 21 · $6.00 strike · spot $6.52

Excludednever scored

Passed · option premium check

  • Premium$0.32
  • Yield on cash5.3% / 29 days
  • Annualized67%

Annualized yield is a mathematical extrapolation of a 29-day trade, not a promise. Numbers this high usually signal high anxiety.

Excluded, fails the default company screen

  • Market cap $2.8B, below the $10B default
  • Revenue has declined every fiscal year since 2021
  • Debt-heavy balance sheet
The premium can't fix the business. It never reached the grader.

The contract screen

The contract has to clear its own bar.

The trap

A great company, and a contract you still shouldn't touch: three weeks too short, a spread you can't exit, open interest in the double digits.

The FITools solution

Surviving contracts get filtered on the terms that decide whether the trade is even executable: expiration window, liquidity, spread. Delta (the market's rough odds of your strike being hit), strike distance, volume, implied volatility, a yield floor, and an earnings exclusion are there when you want them.

Default contract filters: 25 to 60 days to expiry, high open interest (500 or more contracts), and tight bid-ask spreads (5% or less).

Contract screen · defaults on: 25–60 days to expiry · open interest ≥ 500 · spread ≤ 5% · optional: delta (assignment odds) · strike distance · volume · implied volatility · yield floor · earnings exclusion

Defaults on

25–60 days Open interest ≥ 500 Spread ≤ 5%

Optional

Delta (assignment odds) Strike distance Volume Implied volatility Yield floor Earnings exclusion
Defaults shown · every threshold is yours to change

The score

A fair price, or a trap.

The trap

Accepting a tiny 0.5% downside cushion in exchange for 20% downside exposure because a ticker is trending on social media.

The FITools solution

Five weighted factors, one 0 to 100 score. Yield counts only after it clears a real benchmark, and a fat premium cannot buy back points it loses on assignment risk, liquidity, or volatility that the data can't justify.

PLTR Palantir Technologies

Cash-secured put · Aug 21 · $122 strike · spot $125.03

C64 / 100
  • Premium$6.03 · 4.9% on cash
  • Annualized62%
  • Cushion to breakeven7.2%
Bottom line: a generous payout, but you are accepting a thin 7.2% cushion on a stock that routinely swings 15% in a month. Grade: C.

The flags

Hunting for reasons to say 'no'.

The trap

Selling a covered call right before an earnings report, getting surprised by a gap down, or discovering at exit that the spread eats the profit.

The FITools solution

Great risk management is about finding the single reason to walk away. FITools puts those reasons next to the grade, not inside it: earnings before expiration on every row, spreads too wide to exit fairly, premiums that barely clear the benchmark, volatility the data can't explain. Flags never adjust a score quietly. They sit in plain sight, and the decision stays yours.

Flags · earnings before expiry · wide spread · thin edge · below benchmark · short window · unfavorable volatility · missing vol data

KO Coca-Cola

Covered call · Aug 28 expiry · $85 strike · spot $82.12

B82 / 100
  • Warning: Earnings Jul 28, inside the window. A binary event five days before you'd even settle in.
  • Below-benchmark check, premium clears the income hurdle, thinly.
  • Liquidity: tight, penny-wide markets at this strike. You can get out at a fair price.
  • Volatility: near its 12-month norm. No spike that needs explaining.
Bottom line: a great company and tight spreads, but earnings land in five days. Hold off until the news passes.

Transparent methodology

No black boxes. No secret algorithms.

We show all the work behind every grade. Five factors, five visible weights.

  1. 01 Income edge 30% Does the payout justify the wait? Annualized premium yield above the income hurdle
  2. 02 Assignment safety 20% How big is your crash cushion? Delta (the market's rough odds of your strike being hit) and the out-of-the-money cushion
  3. 03 Execution liquidity 20% Is it easy to get in and out at a fair price? Bid-ask spread, open interest, and trading volume
  4. 04 Volatility quality 20% Is the stock behaving normally, or is panic brewing? Implied versus realized volatility, its percentile, and its stability
  5. 05 Time commitment 10% Is the time commitment in the sweet spot, about 45 days? A measured expiration window centered near 45 days to expiry

Income edge is earned, not given. A contract's annualized yield counts only after it clears the higher of two hurdles: a Treasury-yield benchmark, or a modeled SPY covered-call baseline. If T-bills pay nearly as much for doing nothing, the premium has not earned its points.

A 90–100 EXCELLENT · B 70–89 GOOD · C 50–69 FAIR · D 30–49 MARGINAL · F BELOW 30 POOR

A strong grade compares favorably under the methodology. It does not guarantee a profit.

MSFT Microsoft

Covered call · Aug 21 · $410 strike · spot $390.34

B87 / 100 Warning: Earnings Jul 29, inside the window
  • Income edge 15.2% annualized clears the hurdle with room 30% × 90 = 27
  • Assignment safety 5.0% of room, assignment odds inside the band 20% × 85 = 17
  • Execution liquidity penny-wide market 20% × 95 = 19
  • Volatility quality 26% IV, full but explainable 20% × 80 = 16
  • Time commitment 29 days 10% × 80 = 8
  • Composite87 · B
Every input shown. Every weight visible. Nothing to take on faith.

Live trade analysis

Six real tickers. One honest grader.

Every contract below is real: July 22, 2026 closes, actual expiration dates, premiums consistent with each stock's implied volatility. Select a row to see the five factors and exactly where the points went. One of the six never gets that far.

Johnson & Johnson · Premium $1.06 · 0.4% on shares / 29 days · 5.3% annualized · 4.7% strike distance

  • Income edge clears the hurdle, thinly; calm stocks pay calmly 30% · 80
  • Assignment safety assignment odds in the target band, 4.7% of room 20% · 95
  • Execution liquidity penny-wide market, deep open interest 20% · 100
  • Volatility quality IV near its 12-month norm 20% · 95
  • Time commitment 29 days, near the sweet spot 10% · 100
  • Score92 · A

Flags clear

Patience, paid.

Microsoft · Premium $4.72 · 1.2% on shares / 29 days · 15.2% annualized · 5.0% strike distance

  • Income edge 15.2% annualized clears the hurdle with room 30% · 90
  • Assignment safety 5.0% of room, assignment odds inside the band 20% · 85
  • Execution liquidity penny-wide market 20% · 95
  • Volatility quality 26% IV, full but explainable 20% · 80
  • Time commitment 29 days 10% · 80
  • Score87 · B

Warning: Earnings Jul 29, inside the window

If assigned, you sell at $410, a price you chose in advance.

Exxon Mobil · Premium $1.51 · 1.0% on cash / 29 days · 12.9% annualized · 4.2% strike distance

  • Income edge 12.9% annualized, well past the hurdle 30% · 85
  • Assignment safety modest assignment odds, 4.2% to the strike 20% · 80
  • Execution liquidity tight markets at this strike 20% · 90
  • Volatility quality 24% IV rides the price of crude 20% · 75
  • Time commitment 29 days 10% · 85
  • Score83 · B

Warning: Q2 report expected late July, inside the window

Fine trade. Know that you're also underwriting the price of oil.

Coca-Cola · Premium $0.70 · 0.9% on shares / 36 days · 8.6% annualized · 3.5% strike distance

  • Income edge 8.6% annualized, a thin margin over the hurdle 30% · 60
  • Assignment safety low assignment odds on a quiet stock 20% · 90
  • Execution liquidity penny-wide 20% · 95
  • Volatility quality 14% IV near its norm 20% · 85
  • Time commitment 36 days 10% · 100
  • Score82 · B

Warning: Earnings Jul 28, inside the window

The grade stands. The flag stays. One flag is enough to wait five days.

Palantir · Premium $6.03 · 4.9% on cash / 29 days · 62% annualized · 2.4% strike distance

  • Income edge 62% annualized, maximum points; that is the warning 30% · 100
  • Assignment safety 2.4% to the strike against a ±15.9% typical month 20% · 30
  • Execution liquidity active market, fair spreads 20% · 85
  • Volatility quality 55% IV, elevated and unstable 20% · 25
  • Time commitment 29 days 10% · 60
  • Score64 · C

Warning: Earnings Aug 3, inside the window

You keep $6.03 if it works. You own everything below $122 if it doesn't.

Peloton · Premium $0.32 · 5.3% on cash / 29 days · 67% annualized · 8.0% strike distance

  • Market cap $2.8B, below the $10B default
  • Revenue has declined every fiscal year since 2021
  • Debt-heavy balance sheet
  • Fails the default company screen. Never scored. Excluded
  • Annualized yield is a mathematical extrapolation of a 29-day trade, not a promise. Numbers this high usually signal high anxiety.

The premium can't fix the business. It never reached the grader.

Strike distance: how far the strike sits from the current share price. For covered calls, the room to the strike; for cash-secured puts, the drop before assignment. Illustrative analysis built from July 22, 2026 closing data; premiums are model estimates consistent with prevailing implied volatility. Nothing here is a recommendation to trade any security.

Your broker stays in control

Research here. Execute there.

FITools does not hold investment funds, move capital, or place broker orders.

FITools Research & tracking

  • Research companies and contracts
  • Compare scores and risk factors
  • Track positions manually
  • Optionally import investment data through Plaid
No orders cross this line

Your brokerage Assets & execution

  • Your cash and shares stay here
  • You review the final order
  • You place every trade yourself
  • No capital is transferred to FITools

Manual or connected. Log positions yourself, or import holdings and investment transactions through Plaid.

Read-only boundary. Plaid data supports tracking only. It is optional and can be disconnected.

The most important feature is the one we left out.

After the opening trade

The market moves. The position stays legible.

FITools brings the latest available position data, risk indicators, and next-step research into one view. Scheduled intraday snapshots with on-demand refresh, rather than streaming tick-by-tick noise. Timestamps stay visible, so you always know how old the picture is.

MSFT Microsoft

Covered call · Aug 21 expiry · $410 strike · three weeks after open

Open
  • Premium captured $2.36 of $4.72 50% capture target (the default; yours to change)
  • Breakeven $385.62 $390.34 at open, less the $4.72 premium
  • Unrealized P&L +$2.36 / share call sold at $4.72, marked at $2.36
  • Return if unchanged · max profit +1.2% · +6.2% max profit $24.38 per share: $4.72 premium + $19.66 to the strike
Moderate
Assignment risk

Four levels, minimal to critical, dividend-aware.

Note: Alerts if earnings lands before expiration.

Illustrative position · not live market data · Last snapshot 10:15 AM ET

When an assignment turns a put into shares, and the shares later carry a call, the record stays linked. Realized P&L follows the capital across the sequence, not just the single contract.

Who it's for

Good fit

You understand the trade.

  • You place your own orders
  • You research the underlying before the premium
  • You measure yield against risk, not against your hopes

Not yet

You want the tool to decide.

  • Automated trading
  • Speculative trade alerts
  • A green light you never have to question

FITools is built for the first column. It will frustrate the second.

Rational disclosure

Questions people should ask.

The honest answers below disqualify some readers. That's working as intended.

Is option selling right for everyone?

No. It requires capital you can commit for weeks at a time, the willingness to be assigned and buy or sell shares at your strike, and the patience to collect singles while other people brag about home runs. If any of those is missing, this is not your tool yet.

What can actually go wrong?

Plenty. A covered call caps your upside while leaving nearly all the downside: the stock can fall far more than the premium offsets. A cash-secured put can assign you a falling stock above its market price. In both cases, losses can substantially exceed the premium collected. The premium is compensation for risk, not the removal of it.

Can FITools guarantee income or returns?

No, and you should close the tab on anyone who says otherwise. Grades measure the quality of the process: the business, the cushion, the compensation, the landmines. They do not measure the outcome. Good process loses sometimes. That is what makes it honest.

Does FITools place trades for me?

No. FITools is research and tracking software. Every order is reviewed and placed by you, at your broker. No trade signals, no auto-execution, no custody. See the boundary above.

Why do so many trades grade C or worse?

Because most option premium is fair-or-worse compensation, and the grader is not paid to be optimistic. A grader that hands out A's is not a filter. It is a permission slip. Much of the value is in the trades you don't take.

Plain-English risk disclosure

Options involve risk and are not suitable for all investors. Selling covered calls and cash-secured puts can lose money, including significant losses on stock you own or are assigned. The examples on this page are illustrations built from real market data, not recommendations, and premiums shown are model estimates. FITools provides research tools and education, not personalized investment advice.

Ready to trade excitement for discipline?

Option selling won't make you rich overnight. Executed with quality assets, strict cash reserves, and clear risk parameters, it turns market volatility into a disciplined, repeatable process.

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Options involve risk and are not suitable for all investors.