Look at natty gas, it is a commodity that there is tons of. It has been in a pretty small range for decades. Last year, it ran to 15 I think. I know a guy who used to write futs on commodities. His open write on natty gas was only 2% of his fund I think. Look at the chart, he blew up when natty powered ahead. It is dangerous to do, but if you can figure it out, this is what the big boys are doing.
From your description of objectives, my suggestion would be that you have your core trend position in place to start (i.e. long/short your directional underlying futures position) and THEN consider the options writes against it. The advantage to this is that you would presumably already have accumulated equity in the position and a favorable cost basis/trade location in the underlying to start with. The problem with the strategy that you described to start the thread is that you are defending an options position by making hedges after the fact. If you reverse this logic, then you probably have a better shot at reaching your objectives by writing premium against your core trend underlying positions...
hurt allot of people and it isn't easy to acknowledge the fact that a 2-3% position can lead to a blow out if we don't adhere to strict discipline. Not easy but essential nonetheless. My number 1 trading rule:never blow out again. Have had that experience a couple of times already (thankfully not in the last decade), not something I ever want to repeat. Interesting perspective Vulture. It would also allow me to use wider stops on trades and reduce the likelyhood of getting stopped out during an eratic trend.