Scanning - I use a group of about 25 stocks and
etfs - I try to get them as uncorrelated as possible. I also look for high volume and stable, large percentage moves. High liquidity in weekly options.
Risk rules - the secret to success, along with
backtesting!
I buy calls on instruments trending
bullish, puts on those trending
bearish using the same system, I only buy them 7 to 10 days out since my trade is expected to last only 2 - 4 days on average. I've found that a 54
delta works really well but backtesting using the 30 delta - tests show they are more volatile and the losers loose bigger - but the average monthly
P&L is higher so we will see how it averages out - ask me a couple of months from now
I trade a technical system with specific rules for entry and exits - not based on profit or loss, nor do I pay attention to any news or earnings reports; if it isn't something I can consistently
backtest its effects, it doesn't apply to my rules - this however works for my system and may or may not work for you.
I use a daily chart for entry & exits since my technicals are based on daily movements; I use a minute chart to get the best price on my options once it's time to actually enter or exit a position. I almost always use limit orders so I don't get a surprise on my fills - but lately I've had a couple of times when when my trade has hit its exit signal and its at the peak of a
trading range - really has moved hard and fast and I want to exit quickly to capitalize on capturing as much of the move as possible so I have started using market orders to just testing the waters - I'm a little afraid of what kind of fill I would get with 200
contracts. - Maybe it won't be a big deal, only time will tell.
I'm totally with you on not selling calls - I don't want to worry about margin requirements or make things too complicated to manage. I frequently have 10 - 18 trades on at any given time and just managing those positions takes enough of my attention span. I believe that it is best to keep things as simple as possible. I find, after my partner and I review our trades at the end of the month, how easy it is to make mistakes on simple rules. We set our goals to execute our system as perfectly as possible since over time, it is a systematic approach that pays off for those of us who aren't blessed with the rare talent of intuition and trading by guts.