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Liquid Optionable Stocks/ETFs with Tight Option Bid/Ask Spreads Topic Rating:
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akspeculations
Posted : Saturday, June 04, 2011 9:42:13 PM
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As the title says, I would like to discuss optionable stocks which have tight option bid/ask spreads - say within a certain percentage e.g. the distance between the bid/ask is 3 ... 5 %. I'm talking tight like USO, GLD, SLV, SPY, QQQ. Is there any efficient way to scan for these equities? So far I have been stumbling across liquid tight spreads that I would write down into a watchlist. I haven't been able to necessarily find a way to scan for such opions, other than scanning using tc2000 for extremely high volume and <>.

Here's a list that I use:

RIMM,

XOP,

XRT,

XLF,

SPY,

CAT,

IWM,

FAZ,

VXX,

IYR,

BIDU,

XLE,

FAS,

XLK,

EWZ,

GS,

QQQ,

GDX,

AMZN,

NFLX,

XOM,

GE,

SLV,

YHOO,

UNG,

GLD,

QCOM,

PCLN,

F,

VZ,

USO,

X,

AAPL,

POT,

EEM,

GOOG,

NVDA,

FFIV,



Most of these have weekly options as well. If not they're within a reasonable spread and have okay liquidity. Tell me what you guys think.
diceman
Posted : Sunday, June 05, 2011 3:35:10 AM
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Typically the more active the tighter the spread, so high volume/liquidity is a good start.

I believe Platinum service telechart allows you to plot bid/ask spreads on your chart.
( I’m Gold so I don’t know if you can access that info in PCFs or sort by it)


Thanks
diceman

diceman
Posted : Sunday, June 05, 2011 3:41:29 AM
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Forgot to mention, the bid/ask is for stock price.
(I’m guessing tight stocks would have tight options but never checked)

 

Thanks
diceman

akspeculations
Posted : Sunday, June 05, 2011 5:19:48 AM
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options have bid/ask prices as well... An at the money $39 strike call for DIS has a bid of 0,88 cents and a ask of 0,91 cents. (for an example, a rather tight spread if looking at options).
pthegreat
Posted : Sunday, June 05, 2011 10:57:09 PM

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I created 3 lists :

- penny spread options : stocks with options with a penny spread between bid/ask
- weeklies : stocks with options that have a weekly expiration date
- stocks that have both penny spreads and have weeklies.

www.mirrorcreator.com/files/0OLNDRRB/2011-06-05-penny-options.xls_links

pthegreat
Posted : Sunday, June 05, 2011 11:04:15 PM

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click on one of the 3 download links, a new browser windows opens up, then click on"Please CLICK HERE to go to your download page". Again a new windows opens up.  scroll down and click on "Slow Download" this will download an excell spreadsheet, with the 3 lists.
pthegreat
Posted : Monday, June 06, 2011 12:30:24 PM

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I really like the weeklies:

NFLX weekly 270 puts : $3.00 entry,  $7.00 exit, in 2 hours

http://screencast.com/t/z0rTAEHkFNZ
http://screencast.com/t/vuUMktxVP1H1
akspeculations
Posted : Monday, June 06, 2011 6:34:45 PM
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QUOTE (pthegreat)
I really like the weeklies:

NFLX weekly 270 puts : $3.00 entry,  $7.00 exit, in 2 hours

http://screencast.com/t/z0rTAEHkFNZ
http://screencast.com/t/vuUMktxVP1H1


pthegreat that was beautiful! I got some lunch after that trade :P -

NFLX was on my short list but I happened to forget about it today. Thanks for reminding me.
akspeculations
Posted : Monday, June 06, 2011 6:38:41 PM
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Of course I didn't get the 3,00 entry but it was a rather decent intrday profit if you ask me.
Jpetesmith
Posted : Thursday, June 09, 2011 11:17:44 PM
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pthegreat!- That was awesome! I haven't downloaded it yet, but this has been exactly what I have been looking for. Way to go!!! Talk about getting the most bang for your BUCK! AWESOME BRO!!!
pthegreat
Posted : Friday, June 10, 2011 8:54:52 AM

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I used to have a huge watchlist of about 2000 optionable stocks, and run my scans on them continuously. 
Recently I have reduced my watchlist to about 20 stocks that are all highly liquid and trade weekly options. My profit average has gone up, my indicators act better on these stocks, and it's easier to manage. I prefer the intraday trades on the weekly options. Makes me sleep better at night, and I usually don't make more then 2 or 3 trades a day.
akspeculations
Posted : Saturday, June 11, 2011 8:59:38 PM
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QUOTE (pthegreat)
I used to have a huge watchlist of about 2000 optionable stocks, and run my scans on them continuously. 
Recently I have reduced my watchlist to about 20 stocks that are all highly liquid and trade weekly options. My profit average has gone up, my indicators act better on these stocks, and it's easier to manage. I prefer the intraday trades on the weekly options. Makes me sleep better at night, and I usually don't make more then 2 or 3 trades a day.

I too have a short list and play as you do. I've made ridiculous profits from small sums by day trading options. Do you trade any particular spreads? I typically fool around with purely calls/puts, vertical, and butterfly (which has a great profit/loss margin if played properly) spreads. But on an intraday basis it's usually just one strike I choose.
pthegreat
Posted : Sunday, June 12, 2011 8:53:28 PM

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Hi Ak..,
So far only long call and long put plays on the weeklies. These type of trades you have to act quickly, and I don't have the experience yet to figure out in a few minutes what the best option strategy would be.
I you care to maybe share a couple examples on different option strategies on weeklies, I would highly appreciate it.

thx,
P.
Jpetesmith
Posted : Monday, June 13, 2011 7:03:47 PM
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Hey pthegreat! Also, that is what, I am about to get back into, intraday trade with the weekly options. Are there any ETF's that you prefer, such as any list above from aks? I am doing some paper trading at the moment. I got into PCS at 17.8 buy pt. Of course, I didn't want to day trade the option, but that is how I look forward into making my Day Trades into Swings. So far, so cool on my option paper trade. Although, I should have marked down the cost for the option. I have made about a ten percent gain just in pts. in 7 days. Also, I enjoy watching the qqq. Every week there is a about a pt. move, so it's known what that spells. Also, I am beginning to watch FAS more. I really enjoy the tight spreads in context to the option contracts.I would also like to second P's question to akspeculations.Thank you for starting up such an enthusiastic conversation.Joshua
akspeculations
Posted : Monday, June 20, 2011 2:22:15 PM
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In response to both of you I'll share an example of an example of an intraday trade on SPY calls I had today.  I prefer nice day trades like this but usually they aren't as smooth and cyclical / and / or they aren't as profitable which is why I sometimes tend to have a swing trade attitude.  If I plan out a longer trade (i.e. longer than one trading session) I will trade a vertical spread at least.  I did that when I was figuring SLV, or silver would take a dive.

Today since I spent a lot of time reading the WSJ I didn't spend as much time as I usually do looking for reversals.  In any event, here is a photo of my trade:



Here is the link just in case: http://img857.imageshack.us/img857/1315/daytradeexamplespy11062.png

I usually like these trades because I avoid all overnight risk.  As far as something else with a spread, I will go through my trade history and post an example of a butterfly trade that I put on a while back.
pthegreat
Posted : Monday, June 20, 2011 2:29:08 PM

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funny, around the time you closed your SPY calls, I got into some SPY weekly 128 puts  :-)

rejection of the overhead trendline on the hourly, ans some sell signals on the 5min.

http://screencast.com/t/YKcBHA16edh

I'm experimenting in TOS as well to add indicators directly on the option data.  wish we had option chain data in stockfinder.
pthegreat
Posted : Monday, June 20, 2011 2:37:35 PM

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And I just got out, with almost 30% .
I like to use trendline breaks on the 5min chart.
http://screencast.com/t/uctM7UWZH3w
akspeculations
Posted : Monday, June 20, 2011 3:08:14 PM
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QUOTE (pthegreat)
funny, around the time you closed your SPY calls, I got into some SPY weekly 128 puts 

rejection of the overhead trendline on the hourly, ans some sell signals on the 5min.

http://screencast.com/t/YKcBHA16edh

I'm experimenting in TOS as well to add indicators directly on the option data.  wish we had option chain data in stockfinder.


Haha.  On a technical standpoint I agree 100% with you.  Buying calls this morning was more of a spur of the moment thing - in which I knew that I wouldn't hold for more than a few hours.  I considered buying puts, but I decided that one nice trade was enough.  I made a little over 25% on mine, congrats with your trade of 30%.
akspeculations
Posted : Tuesday, June 21, 2011 1:31:50 PM
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Incredibly great day on the market today. Traded AAPL's 325 weekly calls. I bought because it was considered to be the most oversold on my list (With the help of some criteria I create an oversold/overbought rating, the higher/lower the reading the more overbought/oversold it is). VZO proved to be very helpful in this case. Across practically all time frames was accurate, from daily, to 4 hr, 2hr, 1hr, etc....
pthegreat
Posted : Tuesday, June 21, 2011 1:39:57 PM

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what are u kidding?!, one of the best days this year. over 100% on PCLN 480 weekly calls, 70% on SLW 31 weekly calls.    tomorrow FOMC !
pthegreat
Posted : Tuesday, June 21, 2011 1:47:31 PM

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I created a column in SF that shows percent change from the day's open. there's a similar indicator available in SF that shows percentchange from yesterdays close. but to track the change from the open, you can quickly see stocks that move up (or down) from the open. then sort your watclist by this column, and you'll see stocks that are moving up, move to the top of your watchlist

plot = ((price.Close - price.Open) / price.Open) * 100
pthegreat
Posted : Thursday, June 23, 2011 1:20:07 PM

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We need a chat room, just for weekly option traders!  

GOOG 480/485 put spread  200% profit since yesterday.  (was my 1st spread, and should have just gone long puts)
SPY 130 puts 150% 

BIDU 120 calls from 10AM : 50%

anyone know a chat room for these type of traders? or interested in starting one?
Bill Baker
Posted : Thursday, June 23, 2011 1:37:47 PM
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QUOTE (pthegreat)
We need a chat room, just for weekly option traders!  

GOOG 480/485 put spread  200% profit since yesterday.  (was my 1st spread, and should have just gone long puts)
SPY 130 puts 150% 

BIDU 120 calls from 10AM : 50%

anyone know a chat room for these type of traders? or interested in starting one?


Sure, Steven Place runs such a place and specializes in swing trading equity options.  You can find more info here:
http://stocktwits.com/store/partner/investingwithoptions

Not sure if the link above is allowed here.  If it isn't you can find him at stocktwits dot com.
Jpetesmith
Posted : Tuesday, June 28, 2011 10:00:50 PM
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Hey guys and gals. Mind expressing any strategies used to Day Trade with these ? Do any of you use BOP? I like two minute charts using BOP. I also watch a lot of news for forecasting. Investors.com for watching volume, even though it is delayed. Also Early mornings I like using the MarketWatch for pre-market action and http://www.cnbc.com/id/17689937 for pre-market direction, I watch the nasdaq futures mostly. I like watching the TRIN also. You know. Anything over 1 being bearish under bullish. I kind of follow Ken Calhoun, too. He has great webinars. He has written a book or two on Day Trading, very intelligent. He's pretty sharp. I would also like to hear from any day traders whom have learned from Martha Stokes, CMT. She is sharp! I have a job so on my days off. I like to check out the markets, until I can save up enough for resources to get properly trained. I do my best to learn from webinars from WORDEN. THANKS WORDEN FACULTY! I have learned a ton in the past year. Also, DayTrader Rockstar. He's pretty sharp with his technique of Stochastics 14,3,3 on YOUTUBE. I have an in depth file from most of everyone that I have learned from mentioned. So, any advice would be great. Thanks, J the Book Worm.
pthegreat
Posted : Tuesday, June 28, 2011 11:32:30 PM

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Jpete..,

I could tell you, but I'd have to kill you.  :-) just joking.

I use cramed (spelled backwards) indicators.  Best kept secret ... (can't be mentioned on these forums with having your posts pulled).
But basically, since you have a shortened time span on these, I look for divergences between price and a certain "cramed" volume based oscillator, same principles as TSV and/or moneystream, RSI.. etc..   look for breakouts/pullbacks at resistace/support/trendlines. combine hourly and 15 and/or 5min timeframes for buy and sell signals.

something that makes a stock move on a short period. then hop on the calls or puts,  Iprefer the ones that are over $80.00 , the higher the stock price, the larger the moves on the options.
Keep your money management strict, and you'll make tons...

GOOG chart you'll see entries lined up on the hourly and 15min chart, as well as sell signals on both hourly and 15 min time frame. between 6/24 EOD, and 6/28 11AM
http://screencast.com/t/D1suqVsD

280 weekl;y calls :
yup from about $3.00 to $12.00
http://screencast.com/t/e0PQErcq



pthegreat
Posted : Tuesday, June 28, 2011 11:39:36 PM

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oh and if you look carefully at the GOOG hourly, you see a bearish divergence  on the not to mention indicator. and indeed I did take a small position puts at the EOD. its a bit risky with the markets thundering forward here. but hey. no guts no glory, maybe I got a little over excited after the 300% profit. we'll see tomorrow.
Jpetesmith
Posted : Wednesday, June 29, 2011 1:36:11 AM
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I really appreciate your input. Congratulations on the 300% (WOW) increase!! Could you give me an idea on your statement of, "Keep your money management strict." I am a newbie of sorts, so you can understand. That is where I get burned, every time! I want to get the feel down for making my time worth the money. I am to the point. I can make consistent gains of about 3%+. I had to get over the emotional issues that come with money management. In my short period of time of day trading these types of options. Support and Resistance are two of the strongest indicators. Do you ever go lower than the 5 min chart? Thanks for Sharing-Jpete
BobMc
Posted : Wednesday, June 29, 2011 11:37:31 AM
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Peter,
Where did you get that option chart and how did you get the td stuff on it?

Thanks
BobMc
pthegreat
Posted : Wednesday, June 29, 2011 11:49:01 AM

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QUOTE (Jpetesmith)
I Could you give me an idea on your statement of, "Keep your money management strict."


As you probably know, you need at least $25k in order to daytrade. Or if below 25k a maximum of 3 daytrades in any period of 5 days.

my rules : use 10 to 15% of capital per trade. don't hold more then 2 trades at any time. 40% stop loss on the option, or if the pattern of the trade is broken (for example a stop loss below a support line on the stock), whichever comes first.
profits add up quick, but so do losses as well. so you have to be very disciplined.  Whatever plan you have, you have to stick to it. with weekly options there is no time for "it will bounce back" thinking.

I don't usually go lower then 5min charts.

stopped out of my GOOG puts . had a resistance at 495.59, closed above it at 11AM.  about 25% loss.
pthegreat
Posted : Wednesday, June 29, 2011 12:17:08 PM

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I have asked worden many times for option chain data feeds.
here an example of the indicators on a GS 5min 130 weekly call.
this morning at 9:30 broke the resistance, with a buy signal yesterday. Since the brkout, the calls are up from about $1.40 to $3.20 now.

http://screencast.com/t/5tOIHjyVuQW
Jpetesmith
Posted : Wednesday, June 29, 2011 5:40:12 PM
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Option Chain Data Feeds!!! Very nice presentation. I really liked the charts. Looked like some serious fun. Also, I appreciate your explanation of "Keeping your money management strict." Good looking out on GS. It was one that I had missed to put on my watch list. Any way, please correct me, if I am wrong. With OPTIONS trading, there is no limit amount of trades made during a 5 day trading period. I watched a webinar from my broker twice. Am I wrong? Oh, so with the new list of about 30 stocks that I have obtained, some weekly and some most bang for the buck on the monthly option contracts. My plan now is to learn them inside out technically. Thanks for the motivation pthegreat and akspeculations.
pthegreat
Posted : Wednesday, June 29, 2011 5:55:20 PM

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It's a law set out by the SEC, to which brokers have to adhere.

http://en.wikipedia.org/wiki/Pattern_day_trader

I have found it to be increasingly more difficult to be profitable with a small account then with an account over 25k, because of this limitation.

BobMc
Posted : Wednesday, June 29, 2011 9:27:09 PM
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Thanks for the info Peter

Best of luck to you 
Regards
BobMc
Jpetesmith
Posted : Thursday, June 30, 2011 5:06:21 AM
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Just got in from a late night of work and had left my computer on. A question pops up in my mind. Do you watch any pre-market action. I haven't kept up with it as much as I need to, but I look for higher or lower volume from the previous day pre- market and early morning patterns forming such as; Cups with or without handles, Aggressive angles Up/Down and there changes in ascent or descent and Support and Resistance Level Bounces, Channels and the regular patterns HS or Inverted HS, and Consolidations. Everything moves so quickly. I have a daily log that I was keeping up with. My plan is to become more dedicated to all of this. "If it takes five years or five minutes. I want to learn how to make money!" Forgot who quoted that on Business Radio from a while back, but it is a quote that has always STUCK in my head. I have a much smaller account than the 25,000. It is my Goal to achieve that this year in savings and trades. Last year, my first, was a big loser, but this year I am more seasoned as to what to look for. At the moment, I am studying MA 3,13,34 and 55, my Ken Calhoun and Markus Heitkotter Hybrid Strategy (Funny they use to work together) on the two minute charts with candles. I look for there crossovers as confirmation for buy signals coming out of a buying/selling pattern. Volume w/ema 25. Also, I look at BOP early in the morning for direction for the day. I am still working on that last one. The 100's seem to have more significance. Lots of them mean a a nice pop up. Several of them mean. It is going to retrace then pop up.For my 15 Minute charts, I have EMA 55, 34, 13, and 3. The rule stated from Markus Heikotter (sp?) is to not buy when you see a wide gap between the exponetial moving averages. Lately, I have noticed a neat Squeeze Play in the 3 and 13 EMA. Just as long as the Price doesn't go 10 cents below the 13 EMA . The price should pop back up. When all of the EMAs cross it is a buy or sell signal. I study it with the QQQ. It is where I am comfortable. Of course, I plan to study other symbols and there actions. I also have Wilder's RSI 8 plotted on the 15 min with BOP. If you go back over it where there is green. You may see where there has been a buying area, very cool. Thanks Martha Stokes for that Awesome Webinar. I really love her stuff to look at daily, weekly, and monthly charts. I have so much of her stuff on notes hand written and printouts. For the days I have free, and I am winding down from studying. I like to draw support and resistance lines on my watch list's monthly, weekly and daily charts. Recently, I found some older stuff with RSI 9 plotted over RSI 3 on the daily. So, I have been checking that out, also Wilder's RSI 9 and 3. I have heard M.S. mention it as a crossover for buy/sell signals in certain Market Conditions, so that's neat! Also, learning about the whole world economically through the stock market intrigues me dearly ( Mass Psychology at its finest). Oh and BTW, I am reading the classic "Trading for a Living" by Dr. Alexander Elder. Thank you and Keep in Touch.
BobMc
Posted : Thursday, June 30, 2011 3:06:23 PM
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Peter, would you mind sharing the sf charts shown in this thread.  Somehow I messed-up the one that I had

Thanks

Regards
BobMc
pthegreat
Posted : Thursday, June 30, 2011 3:14:51 PM

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no problem.
layout shared.  
be aware to shorten your daily and intraday bars to about 700 or so. It takes a lot of resources to run this layout.
pthegreat
Posted : Thursday, June 30, 2011 3:50:16 PM

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NFLX 5min chart,  traded the 260 weekly calls from green arrow up to red arrow. +30% profit in 21/2 hour.

http://screencast.com/t/5XUrKQRnlsL
Bill Baker
Posted : Friday, July 01, 2011 12:18:26 AM
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QUOTE (pthegreat)
NFLX 5min chart,  traded the 260 weekly calls from green arrow up to red arrow. +30% profit in 21/2 hour.

http://screencast.com/t/5XUrKQRnlsL


Hey Pete, I was wondering - why do you post your charts on an outside link instead of just posting the chart here?  Easier for multiple postings?
pthegreat
Posted : Friday, July 01, 2011 9:19:44 AM

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QUOTE (Bill Baker)
Hey Pete, I was wondering - why do you post your charts on an outside link instead of just posting the chart here?  Easier for multiple postings?

I used to do that, however due to some limitations of this website, depending on the size of your monitor, some people weren't able to read the text of the posts anymore. So using external links, keeps the postsings clean and readable for all.
pthegreat
Posted : Friday, July 01, 2011 10:06:08 AM

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http://screencast.com/t/MauYXYfXZoZ
nearly a double on the 265 calls in 20 minutes.
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