Daemon, thanks for reading and working through the math. I may not have explained it very well, but the 20% return is what I earned in my actual account from my actual options selling that month, rather than the Apple example. You are correct that the Apple example is an 11.5% cash return. Better than the cash yield on most assets, but not the same as the 20% I received in December.
I don’t usually sell puts on popular stocks like Apple, because the premium is less. I prefer to invest in undervalued, out of favor stocks like Valero six months ago. I also don’t sell puts further out than about 6 weeks, even though that would increase the premium. There are TONS of variables in options pricing, so it is a balance between how risky the underlying security is perceived to be (VLO was way out of favor when I bought it for $47 in Sept because everyone thought we would never drive again), the time period involved (longer periods have higher premium), and the probability that the option will be exercised (selling puts close to the current price will generate more premium because they are more likely to result in you having to buy the stock).
For example, on Dec 21 I sold a put for Holly Frontier (another refiner that has been out of favor until recently) with a strike price of $20 (stock was trading for just under $25 at the time), and an expiration of Jan 15 for $0.30 / share. That is a 1.5% return on capital risked ($30 / $2000 if assigned) in 25 days, which equates to about a 22% annual return. This particular put expired worthless as HFC took off, so I just kept the $30 and sold more puts.
I hope that helps clarify!