You're welcome, Swing. I have found developmental biotechs are pretty good for selling naked puts, once you have an idea when key news is coming. For example, too many years ago with MNKD, as they were running toward a PDUFA date (say in January), and say the stock was at $3.50 in July, you could be pretty much confident that the stock wouldn't be below $2-$3 in December, yet the premiums were pretty decent. Of course, surprises happen, but those happen in every stock. Difference is, you get a surprisingly decent premium on something as speculative as a developmental biotech.
Although I have closed out several, I still have decent size positions in January 2014 $2 and $3 puts which I sold long ago; I closed out some $1.50's, but too much spread between bid and ask on the $2 and $3, so I will hold and hopefully nothing too bad happens and they expire January worthless. The downside is the margin requirement - If you have 100 contracts at $2 strike, you need to have $20,000 cash or equity margin power in your account. Contrast that with, say, GE, where if you had 10 $20 puts (I haven't looked by I'm assuming GE is around $22-$23), you don't need $20,000 of cash or equity, you need only about $3,500 or so, so you can see that your percentage return is very, very healthy. But....when you play with margin like that, you can get carried away, so you figure, "well, I'll put up $21,000 of cash and instead of 10 contracts, I'll sell 60." All very good until something causes your stock to tank, and now for every dollar below $20 that the stock falls, you're out $6,000 - that will eat up you "great return" very, very quickly and turn it into a friggin nightmare.
One more thing, especially in developmental biotech, you just don't want to get too greedy and sell puts with a strike price too near the current price; if you're going to take that kind of risk, you might as well buy the stock and hope it shoots up - that will compensate you for the risk you just took, whereas the close to the money put, while very enticing, doesn't make sense to me from risk/reward perspective.