How to pick best call and put options for day trading?
- zman492Lv 71 decade agoFavorite Answer
For the record, I believe day trading options is almost always a bad idea. Do not take my answer as a recommendation to day trade.
There are several reasons that I think it is a bad idea, one of which is that for most options quotes must be in increments of $0.05 (if the premium is less than $3.00) or $0.10 (if the premium is greater than $3.00) which effectively creates a large vigorish. That particular problem can be mitigated by limiting your trading to the subset of options that trade in penny increments. Here is a list of stocks with options trading in penny increments:
A - Agilent Technologies, Inc.
AMD - Advanced Micro Devices, Inc.
CAT - Caterpillar, Inc.
FLEX - Flextronics International Ltd.
GE - General Electric Co.
INTC - Intel Corp.
JAVA - Sun Microsystems, Inc.
MSFT - Microsoft Corp.
QQQQ - Nasdaq-100® Trust Shares
SMH - Semiconductors HOLDRs
TXN - Texas Instruments, Inc.
WFMI - Whole Foods Market, Inc.
WM - iShares Russell 2000® Index
AAPL - Apple, Inc.
AMGN - Amgen, Inc.
AMZN - Amazon.com, Inc.
BMY - Bristol-Myers Squibb Co.
C - Citigroup, Inc.
COP - ConocoPhillips
CSCO - Cisco Systems
DIA - Diamonds Trust
DJX - Dow Jones Industrial Average index
DNDN - Dendreon Corp.
FCX - Freeport-McMoRan Copper & Gold, Inc.
GM - General Motors
MO - Altria Group, Inc.
MOT - Motorola, Inc.
NYX - NYSE Euronext
OIH - Oil Services HLDRS
QCOM - Qualcomm, Inc.
RIMM - Research in Motion Ltd.
SPY - SPDR S&P 500
T - AT&T, Inc.
XLE - Energy Select Sector SPDR
XLF - Financial Select Sector SPDR
YHOO - Yahoo!. Inc.
XSP - Mini SPX index
AA - Alcoa, Inc.
AIG - American International Group, Inc.
BAC - Bank of America Corporation BAC
BSC - The Bear Stearns Companies, Inc.
CFC - Countrywide Financial Corporation
DELL - Dell, Inc.
EBAY - eBay, Inc.
EEM - iShares MSCI Emerging Mkts. Index Fund
EMC - EMC Corporation
F - Ford Motor Company
GS - Goldman Sachs Group, Inc.
HAL - Halliburton Company
HD - The Home Depot, Inc.
JPM - JPMorgan Chase & Co.
LEH - Lehman Brothers Holdings Inc.
MER - Merrill Lynch & Co., Inc.
MNX - Mini-NDX Index Options
NEM - Newmont Mining Corporation
PFE - Pfizer, Inc.
RIO - Vale
SBUX - Starbucks Corporation
SNDK - SanDisk Corporation
TGT - Target Corporation
VLO - Valero Energy Corporation
VZ - Verizon Communications, Inc.
WM - Washington Mutual, Inc.
WMT - Walmart Stores, Inc.
XOM - Exxon Mobil Corporation
Within this subset of options, I would recommend you limit your trades to the more liquid options, usually those that are short term and near the money.
- 4 years ago
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- Anonymous1 decade ago
Look for options of underlying stocks with high volatility. These will have higher premium.