Reputable stocks best for option trade

Screening Filters

1. market_cap ≥ 200,000,000,000 (≥ $200B)

   • Purpose: Focus on very large, established companies.
   • Rationale:
     • “Reputable” usually implies well-known, financially significant, relatively stable businesses.
     • Mega-cap stocks ($200B+) tend to have more analyst coverage, institutional ownership, and regulatory scrutiny, which translates into higher perceived quality and credibility.
     • This filter steers you away from small, speculative names and toward blue-chip companies that are more appropriate for many options strategies.

2. monthly_average_dollar_volume ≥ 15,000,000 ($15M/month)

   • Purpose: Ensure liquidity in the underlying stock.
   • Rationale:
     • Higher dollar volume means the stock trades often and in meaningful size, which generally leads to tighter bid–ask spreads and easier trade execution.
     • For options traders, a liquid underlying is crucial to avoid slippage and difficulty entering/exiting positions.

3. is_index_component: GSPC (S&P 500 components)

   • Purpose: Restrict results to S&P 500 stocks.
   • Rationale:
     • The S&P 500 is widely viewed as a benchmark of large, reputable U.S. companies.
     • Inclusion requires meeting stringent size, liquidity, and profitability criteria, which aligns well with “reputable US stocks.”
     • S&P 500 names also tend to have deep and active options markets, making them good candidates for options trading.

4. list_exchange: XNYS, XNAS, XASE (NYSE, NASDAQ, NYSE American)

   • Purpose: Limit to major U.S. exchanges.
   • Rationale:
     • These are the primary U.S. stock exchanges with robust regulation and disclosure standards.
     • Focusing on these exchanges reinforces the “US” and “reputable” aspects of the request and excludes OTC or lightly regulated venues.

5. is_optionable: True

   • Purpose: Include only stocks that actually have listed options.
   • Rationale:
     • Essential for your request—if a stock isn’t optionable, it’s irrelevant to options trading.
     • This ensures every result is directly usable for executing options strategies.

6. option_iv_rank between 35 and 80

   • Purpose: Target stocks with moderately elevated implied volatility relative to their own past.
   • Rationale:
     • IV rank measures how current implied volatility compares to the stock’s own historical range (0 = very low vs past, 100 = very high vs past).
     • A range of 35–80 suggests:
       • Not extremely low IV (which may offer limited premium for sellers and weaker price moves for buyers).
       • Not at the very top of the range, which can sometimes indicate unusual, event-driven risk or extreme pricing.
     • This band is often attractive for many options traders: enough volatility to make options “worth trading,” but not so extreme that pricing is likely to be distorted or risk excessive for typical strategies.

Why Results Match Your Request

• The S&P 500 + ≥ $200B market cap + major U.S. exchanges combination narrows the universe to large, well-known, and generally reputable U.S. companies.
• The liquidity filter (dollar volume) and “optionable only” restrictions ensure these names have active, tradable options markets, which is central to “best for options trading.”
• The IV rank filter (35–80) focuses on stocks where options are likely to be interesting from a risk/reward and premium perspective, aligning with the idea of “best” candidates for actual trading, rather than just any optionable stock.