Gain a Trading Edge with an Option Scanner
An option scanner filters option contracts across many underlyings by rules you set, such as expiration, moneyness, volume, open interest, implied volatility, or premium, so you review a short list instead of scrolling through every chain. It does not predict profits; it saves search time and applies your criteria consistently. The MarketXLS Option Scanner lets you select stock symbols, collect their option chains and quotes, add columns, sort, filter, and group the contracts, and copy the filtered list to Excel. This article is educational, not investment advice.
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What is an Option Scanner?
An option scanner is a screening tool for the options market. It pulls option chains for a list of underlyings and returns the contracts that match your filters, for example calls expiring in 30 to 45 days with open interest above 1,000 and implied volatility above a threshold.
Benefits of Options Scanning
Options scanning simplifies the process of finding suitable trades for a wide range of trading strategies. It reduces the manual effort in analyzing hundreds of options contracts, and allows traders to focus their time on developing the most suitable strategies. The main benefit is consistency: every contract is judged by the same rules, which makes it easier to compare candidates and avoid missing liquid alternatives.
Types of Analysis
Options scanning involves technical analysis as well as fundamental analysis. Technical analysis involves examining the historical data of options contracts and stock prices. Chart patterns, momentum indicators and support/resistance levels are used to identify potential trading opportunities. Fundamental analysis assesses the key financial and economic factors that are likely to affect the prices of an option contract. Factors such as earnings reports and macroeconomic indicators are considered.
Applicability of Options Scanning
Options scanning is applicable to a wide range of trading strategies, such as swing trading and long-term investing. Swing traders typically buy and sell options contracts with short-term, one- to three-month expiration dates. Options scanning lets swing traders quickly narrow chains to contracts that meet their liquidity, expiry, and pricing rules.
On the other hand, long-term investors typically buy and sell options contracts with expiration dates of six months or more. By analyzing historical data with options scanning, long-term investors can more accurately estimate option prices over a longer duration.
Option Pricing
One of the key aspects of options trading is assessing the pricing of an option contract. Option pricing is based on various factors, including volatility, market sentiment and time. Knowing the fair value of an option contract provides traders with a better understanding of whether an options trade is profitable. Option pricing analysis can be done with an Option Scanner to quickly gather the necessary data.
Risk Management
Options scanning and pricing analysis helps traders to define their risk and to add safety to their trading plans. Knowing the volatility of an option contract provides information on the potential losses. A risk management plan typically limits the amount of capital that is put at risk by reducing trade size or by predicting the maximum potential losses.
Using MarketXLS to Gain a Trading Edge
The MarketXLS Option Scanner works in five steps: select stock symbols, collect option chains and quotes, add the columns you want, sort, filter, and group the contracts, and copy the filtered contracts to Excel. In Excel, the MarketXLS add-in can then pull live chains with functions such as =QM_GetOptionChain("AAPL") and list the most active contracts with =TopOptionsByVolume("AAPL"). Options data is end-of-day on the Standard plan and real-time on the Advanced and Business plans.
Related reading:
How To Find The Most Active Options (Marketxls’S Option Scanner)
Option Scanner
Craft Your Own Strategy with Active Options Trading
