A List of the Best Stocks for Options Trading 2020
With the growing popularity of options trading recently, I have noticed that many new options traders do not know which stocks are the best for options trading in 2020. In fact, most new options traders do not know which stocks typically even offer options trading. General questions that have popped up across the internet suggest that most new options traders began as penny-stock traders. This is a big transition and needs proper guidance. Good thing Wall Street Prodigy is here! I will ease that transition for you. Here is a list of the best stocks for options trading 2020:
- AAPL – Apple Inc.
- AMD – Advanced Micro Devices, Inc.
- AMZN – Amazon.com, Inc.
- BA – Boeing Co.
- BYND – Beyond Meat Inc.
- GOOG – Alphabet Inc. Class C
- NFLX – Netflix Inc.
- NVDA – NVIDIA Corporation
- SPY – SPDR S&P 500 ETF Trust
- TSLA – Tesla Inc.
There are Tons of Stocks for Options Trading, Why are these the Best?
These are the best stocks for options trading because of their popularity. Their popularity make them lucrative to trade for several reasons.
First, if they are popular, you can be sure that the algorithmic systems will be trading them. Algorithmic trading is great for creating the clean market structure that we are taught to trade in our trading textbooks.
Secondly, you can expect a higher degree of volatility throughout a trading session. Volatility is created due to the high trading volume. Another reason for the volatility is because these companies are a major part of market indexes, therefore, they are affected heavily by market sentiment (ex. strong green market indices would suggest strong upward momentum in these names). Volatility is needed to give us the price swings that are necessary for day trading and swing trading strategies.
Finally, and most importantly, their popularity guarantees us a higher degree of option liquidity. This is last on the list, but do not underestimate its importance! Most stocks do not have options with enough liquidity for day trading and swing trading strategies. The stocks listed earlier are well-known for their option liquidity, making them perfect day trading and swing trading candidates.
Let’s Take a Look At Each Stock Individually
AAPL – Apple Inc.
Daily Range: 5.00
Weekly Range: 12.00
Daily Volume: 40M
AMD – Advanced Micro Devices, Inc.
Daily Range: 2.00
Weekly Range: 4.00
Daily Volume: 61M
AMZN – Amazon.com, Inc.
Daily Range: 40.00
Weekly Range: 96.00
Daily Volume: 4M
BA – Boeing Co.
Daily Range: 10.00
Weekly Range: 20.00
Daily Volume: 28M
BYND – Beyond Meat Inc.
Daily Range: 7.00
Weekly Range: 20.00
Daily Volume: 17M
GOOG – Alphabet Inc. Class C
Daily Range: 20.00
Weekly Range: 50.00
Daily Volume: 2M
NFLX – Netflix Inc.
Daily Range: 12.00
Weekly Range: 20.00
Daily Volume: 7M
NVDA
Daily Range: 7.00
Weekly Range: 14.00
Daily Volume: 12M
SPY
Daily Range: 3.00
Weekly Range: 8.00
Daily Volume: 97M
TSLA
Daily Range: 50.00
Weekly Range: 100.00
Daily Volume: 18M
Final Key Points
With each stock, I listed the daily range, weekly range, and daily volume for you. These are very important things to consider and know when looking for the best stock for options trading. A wider range equates to a higher profit potential. Volume, although it does not denote option volume or open interest, it gives you insight into how many people are trading that particular stock. If many people are trading it, there is a good chance that the options have a lot of volume as well.
Now that you know the best stocks for options trading, it is time to learn some good trading strategies to maximize your profitability. Start with the basics first: learn how to chart support and resistance, then look into trading using continuation patterns.