Stcks to trade options

Screening Filters

1. is_optionable: True

   • Purpose: Only include stocks that actually have listed options.
   • Rationale: This is the core requirement. Many smaller or illiquid stocks don’t have options at all; this filter guarantees every result is tradable via options.

2. is_index_component: ['GSPC', 'RUT', 'DJI', 'NDX']

   • Purpose: Focus on stocks in major U.S. indices (S&P 500, Russell 2000, Dow Jones, Nasdaq 100).
   • Rationale: Index constituents are typically heavily followed, actively traded, and have more liquid and deeper options markets with tighter bid/ask spreads and more strike/expiration choices—ideal for options strategies.

3. market_cap: {'min': 5000000000} (≥ $5B)

   • Purpose: Restrict to mid/large-cap companies.
   • Rationale: Larger companies tend to have higher trading volumes and more institutional participation, which usually translates into more active options chains, better liquidity, and more reliable pricing for both buying and selling options.

4. monthly_average_dollar_volume: {'min': 1000000} (≥ $1M/month)

   • Purpose: Ensure a minimum level of trading activity in the underlying stock.
   • Rationale: Active underlying trading is a strong proxy for options liquidity. Higher dollar volume generally leads to more active options, narrower spreads, and easier trade execution.

5. price: {'min': 10, 'max': 300}

   • Purpose: Target reasonably priced stocks for practical options trading.
   • Rationale:
     • Min $10: Avoids penny stocks and very low-priced names whose options are often illiquid, extremely volatile, or not listed at all.
     • Max $300: Avoids very high-priced stocks where option premiums can be extremely expensive and position sizing becomes harder for many traders. This range balances affordability with quality.

Why Results Match the Question (“stocks suitable for trading options”)

• Every stock returned has listed options available (directly matching the requirement).
• Liquidity filters (market cap, dollar volume, and index membership) bias results toward names with active, tighter-spread options markets where trades are more likely to fill at fair prices.
• The price filter avoids both very low-quality and very high-ticket stocks, making the resulting list more practical for a wide range of option strategies and account sizes.