Instead of doing it on an index, pick stocks that you wouldn't mind to own, and write the puts away!! If the market falls eventually, you will own the stocks for cheaper, and you can start to write CCs on them...
I use the equity for active trading but my overnight margin requirement is only 20-25% of equity, so 80-75% is excess cash reserves. The trading operation is returning 23% annualized over the previous 5 years. I'm happy if I can add another 3-4% on top it. I do not want to lock up cash for long periods, that is why I will go for SPY options that offers multiple strikes to select from in 3-9 days out (friday and wednesday expirations).
Will you size according to available cash? So, have the full 80% excess cash to secure the puts? Say 80k cash reserve, so short 3x ATM SPY puts? What if you would do putspreads? Slightly OTM but for bigger size, 2x or something? That way you're more covered for a large drop but still take a similar amount... and you don't feel smaller swings as much. Eventually you will get swamped with a large drop and your excess cash reserve will be tied up totally and might affect your active trading with having less available to cover an increase in margin.... depending on what you actively trade, you might get cornered and you don't want that at a time where you need it most. (I've been there... no fun). You need to keep your active trading as your main purpose and at all cost keep that buffer up.... a couple extra % might not be worth it mate...
There is really only one way to effectively do it while hedging off risk and it involves a ton of capital. Why would you put up a hundred thousand to earn 1%? You can get better yield off no risk corporate bonds(SIFI). I have alerts come up when you can arb with Deep ITM calls and puts, but there isn't a whole lot of spread to gain unless you have access to portfolio margining(RBH). I don't trade it all that often because I don't like to look at the screen 8-16 hours a day. My personal preference. Now, there is money there even after all the modernization. But, you shouldn't ever trade this out of a reg-t account. The capital required is insane. Either go join a firm or get portfolio margining. Now, if you have access to OTC products the sky is the limit.
I think a 10-15% annual portfolio return on cash secured puts is reasonable without having to take on more exposure than one would be doing with a buy and hold. The trick is knowing when it's worthwhile to short a put and when it is not. This entire year has been challenging in that regard because volatility is so low and personally, I feel that this bull market has run its course so I'm not looking to take on more long risk. Consider selling strangles.