Manually sifting through potential options trades to find the winning tickets is like searching for a needle in, well, a market floor full of needles. You need tools that can help you narrow your searches and give you a manageable list of results. This is where options scanners and screeners come into play.

What Are Options Scanners and Screeners?

In a chaotic market, options scanners and screeners are your trusty sidekicks. Scanners help you spot potential golden plays, while screeners refine your focus to zero in on the most promising options.

Options Scanners

Options scanners sift through heaps of data to find trades that meet your chosen criteria. They’re especially handy for spotting opportunities you might miss otherwise.

For example, you can program a scanner to look for unusual activity, like a sudden rise in volume or open interest, which might hint at a potential rally or a squeeze. Scanners can also identify patterns, such as consistent buying or selling in specific sectors, helping you stay one step ahead of the market.

Options Screeners

Options screeners are especially helpful for comparing different options side by side to find the one that best matches your trading goals. Screeners take the data scanners collect and filter it based on your specific needs.

If you’re looking for options with high implied volatility because you expect big price swings, you can set that as a filter. Want options with low premiums? Just plug that in, and the screener will narrow the list down for you. Some advanced screeners also include the Greeks so that you can analyze how sensitive the options are to various factors like price changes or time decay.

Key Features of a Good Options Screener

After staring at options data all day, doesn’t it all start to look the same? A great screener will slice through that chaos like a machete in a jungle of ticker symbols. Here are the features you need.

Customizable Filters

A good options screener lets you filter the massive pool of options contracts down to exactly what you’re looking for. You can set filters based on strike price, expiration date, and IV. Some screeners also let you filter by criteria like options premiums, bid-ask spread, or historical performance.

Volume and Open Interest

Real-time data on volume and open interest provides a snapshot of what other traders are doing, giving you insights into market sentiment. Unusual spikes can signal that something big might be about to happen.

The Greeks

The Greeks measure how various factors affect an option’s price, and a good screener will display this data for every option. Advanced screeners even let you filter by specific Greeks, like finding options with a Delta near 0.5 for balanced exposure or a high Vega to take advantage of rising volatility.

User-Friendly Interface

An options screener should be glitch-free and easy for even beginners to use. Look for a clean, intuitive layout that doesn’t slam you with too much information at once. Ideally, the interface should also include helpful graphs or charts to make interpreting data simpler.

Alerts and Notifications

A high-quality screener lets you set up custom email, text, or app notifications based on specific criteria so you can get away from your screen without missing anything. For example, you may want to know right away if trading volume surpasses a certain level, open interest changes significantly, or implied volatility spikes.

Integration With Trading Platforms

Seamless integration with your trading platform is helpful in fast-moving markets where every second counts. With this feature, you can execute trades directly from the screener without switching between tools. Some screeners even offer direct links to trading platforms, providing real-time data synchronization.

Educational Resources

The best screeners go beyond just showing you data; they help you learn and improve as a trader. You want platforms that offer tutorials, tips, or market analysis to help you understand how to use the screener effectively. Some screeners even provide insights into market trends or explain how to interpret specific metrics like the Greeks or IV.

How To Set Up a Screener for Your Strategy

Change the game by setting up an options screener tailored to your trading strategy. Let’s break down the filtering steps for basic call and put options.

Bullish Strategy: Buying Call Options

Select only call options in the screener: Begin by narrowing your search to just call options since these are designed to profit from rising stock prices.
Set the strike price a little above the current stock price: Look for strike prices just slightly above where the stock is trading now (e.g., $52 to $55 for a $50 stock). These options are out-of-the-money, which keeps the premium low. However, they’re close enough to potentially move in-the-money with a moderate price increase.
Choose options with expiration in the next one to three months: Shorter expiration dates align with the expectation of near-term price movements. Options further out might be more expensive due to time value, so sticking to this timeframe balances cost and opportunity.
Filter for IV between 30% and 60%: Moderate implied volatility levels indicate reasonable premiums. IV below 30% might signal less potential for price swings, while IV above 60% could mean premiums are too inflated.
Set a minimum volume threshold: High volume (1,000 total contracts, for example) makes sure there’s active trading for the option, making it easier to enter and exit trades without affecting the price too much.
Filter for open interest to indicate liquidity: Open interest shows how many contracts are currently held by market participants. A higher number, like 500 contracts and above, signals liquidity, meaning you can trade it without difficulty or significant price changes.

Bearish Strategy: Buying Put Options

Select only put options in the screener: Keep your search clutter-free by limiting the search to puts, as they profit when stock prices fall.
Set the strike price slightly below the current stock price: Look for strike prices just under the current stock price. They might be out-of-the-money now, but it won’t take a major price drop to move them into profit territory.
Choose options that expire in one to two months: Short-term expirations allow you to take advantage of expected price declines while keeping time decay manageable.
Look for IV around 25% to 50%: You don’t want to overpay for the option. Balanced, middle-of-the-road IV suggests the market expects some movement without inflating premiums too much.
Set a minimum volume: Volume reflects trading activity, and with a higher volume, such as 500 contracts, you won’t struggle to buy or sell the option at a fair price.
Find more liquid options by filtering for open interest: Sufficient open interest (say, 300 active contracts) indicates active participation in that option, making it easier to trade and reducing the chance of large bid-ask spreads.

Scanning for High IV Opportunities

First, find an options screener that allows you to filter based on implied volatility. Set the screener to find stocks with an IV percentile above 50%, which means their current volatility is higher than at least half of their historical data. These stocks are experiencing more dramatic price movement compared to their usual behavior.

Now, get tactical and focus on events that tend to increase IV. Stocks with upcoming earnings reports often see a spike in IV as traders anticipate significant price changes. Similarly, look for stocks in the news for reasons like mergers, product launches, or other events that can create excitement or uncertainty in the market.

Pay attention to volume and open interest for the options tied to these stocks. The idea is to find for more liquid, and thus practical, options to trade.

Once you’ve compiled a list of stocks with high IV, dig a little deeper to find those with real profit potential — not every high-IV stock is worth trading. Review the stock’s fundamentals, like earnings reports and financial health, and consider the current market conditions. You can also use technical indicators, such as support and resistance levels, or check recent news to validate your findings.

Using Screeners for Earnings Plays

Start with a reliable options screener that can pull up options for stocks with upcoming earnings announcements as well as filter based on real-time earnings dates. Make sure the screener provides live updates so you’re always working with the latest data.

Filter for stocks that have earnings announcements coming up within the next one to two weeks. This timeframe is ideal because implied volatility tends to rise as the earnings date approaches, reflecting increased uncertainty and anticipation.
Look for stocks with a high IV to find plays that are expected to swing big. Filtering for IV above 50% targets stocks where traders anticipate meaningful action, making them ideal for strategies like buying straddles or strangles.
Set minimum thresholds for volume and open interest. You don’t want to waste your time trying to trade illiquid options. A minimum volume of 500 contracts and open interest of at least 300 should do it.
Choose strike prices close to the current stock price, which are pricier but more likely to wind up in-the-money. Or, select less expensive, slightly out-of-the-money options if you’re looking for a bigger payoff but are okay with taking on more risk.
Look at how the stock typically reacts to earnings reports. Some stocks are known for large post-earnings price swings, while others tend to remain steady. Review the stock’s historical earnings behavior using tools like charts or reports in your screener.
If your screener allows, set alerts for any significant changes in volume, IV, or price action as the earnings date approaches. A sudden spike could indicate increased interest and anticipation, signaling a potentially big move.

Once you’ve done your homework and feel confident, go ahead and place your trades. Make sure to have assessed your risk and have strategies to manage it in place — never go all-in without a plan! Set stop-loss orders, only risk a small percentage of your portfolio, or limit your trades to strategies with defined risk, like spreads. Earnings plays can be exciting, but they’re unpredictable, so never lay out more than you’re prepared to lose.

Integrating Screeners Into Your Trading Routine

Integrating screeners into your trading routine can streamline your process and give you a significant edge. Start each day by launching your screener and setting filters based on your current strategy, whether it’s a bullish, bearish, or earnings play. This daily habit helps you focus on high-quality opportunities instead of wasting time searching manually.

As you analyze the data, stay flexible so that your screener remains an effective tool, regardless of the market conditions. Pay attention to how the market is behaving that day. If the market feels choppy or unusually calm, tweak your criteria to reflect these changes.

Finally, incorporate cross-checking the options you find with your broader trading plan into your routine. A screener can highlight potential trades, but it’s up to you to evaluate whether they fit your risk tolerance and objectives.

Hone Your Strategies With Options Scanners and Screeners

Mastering options trading requires sharp strategies and the right tools. By incorporating options scanners and screeners into your routine, you can quickly identify high-potential plays and capitalize on market opportunities. Embrace the power of technology to help you filter through the noise, ensuring you focus on trades that align with your goals.