Jan
How to pick best call and put options for day trading?
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.
Look for options of underlying stocks with high volatility. These will have higher premium.
January 10th, 2009 at 1:18 pmReferences :
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.
January 10th, 2009 at 2:08 pmReferences :
http://www.optionseducation.org/help/faq/general.jsp#26