If anyone answers this obviously loaded question you will no doubt receive answers that consistently writing options will eventually ruin your account. They will use trite sayings like why pick up pennies in front of a steamroller etc. From your previous posts you are new to this so I would give the same recommendation as most in that you should stay away from options until you understand them a lot better than you do now, but I will try to answer your question since others have asked similar ones.
Anyone who trades options should well be aware that a famous trader who manages hundreds of millions has been selling options for decades and he does quite well for himself. I don't happen to agree with his methodology but it works for him.
There is nothing inherently wrong with most any option strategy. If consistently selling or buying options always led to your doom then no one would do it anymore. Your success will depend on such things as your trading ability, position sizing, risk management, etc. It is not hard to back test premium selling trading ideas. You win a lot then you eventually take a hit. It is impossible to foresee the much quoted "black swan" event, and it is impossible to correctly hedge a short option against it.
Some would say that people who sell puts are crazy and they will eventually blow out. This will of course depend on many things, you may or may not survive depending on your methodology. But these same people probably know traders who have gone home long the ES contract with $5000 or less covering it. They feel they are safe because they have a stop in. If there is a major event it can potentially shut the exchanges down before your stop can be traded and the market will gap down. A mere 6.5% gap and your account is debit. Leverage trading, whether it is futures, stocks, or short options involves considerable risk.
I am not advocating either side of selling or buying or any one specific strategy, to do such would show that you do not understand options. In the hands of an experienced and disciplined trader options can be a good trading instrument. Unfortunately most who trade them are neither.
Your title "monthly income generated" shows that you do understand the risks involved. Capital is somewhat irrelevant since you can short an option spread with little money. Since July 2002 there has not been a move much over 8% in one month in the SPX, so for the last 5 years you could have been selling options profitably and made a sizable return. That monthly percentage return would get you excited, but if you take into account events like 1987 and 9/11 the safe percentage return you can make is nothing spectacular. If you think to just short calls instead, stock takeovers can kill you, and far out of the money index calls trade for very little but sizable monthly moves, 7%+, do happen.
