liquid stocks 4, Most Liquid Options

The Options Industry Council Announces January Options Volume Rises 7.7 Percent on Strongest Volume Since May

Source: OIC, Feb 1, 2013

Last month there were 361 million option contracts traded, about 17.2 million per trading day. That's an increase of more than 7% compared to the average volume last year. A good start to 2013 for option traders because higher option volume makes for smaller spreads and quicker fills.

We decided to take a look at which underlying securities had the highest option volume. Here's the data for today (note that BBRY is the new symbol for RIMM, as of today):

Highest Volume Equity Options Traded Feb 4, 2013
Symbol Contracts % Calls % Puts
AAPL 494,511 59.1% 40.9%
INTC 425,288 92.6% 7.4%
FB 371,843 60.7% 39.3%
BAC 249,216 58.6% 41.4%
BBRY 247,492 62.3% 37.7%
DELL 206,591 68.2% 31.8%
ETP 148,618 98.5% 1.5%
BIDU 120,355 50.7% 49.3%
NFLX 106,747 58.2% 41.8%
MSFT 105,997 49.5% 50.5%
LVS 100,965 85.7% 14.3%

The next few symbols on the equities list (in liquidity order, most to least) are:

YUM, GOOG, C, AIG, F, JPM, CSCO, HLF, and AMZN.

For ETFs, the list is:

Highest Volume ETF Options Traded Feb 4, 2013
Symbol Contracts % Calls % Puts
SPY 1,978,810 38.0% 62.0%
IWM 308,352 17.8% 82.2%
QQQ 287,293 46.9% 53.1%
VXX 228,270 42.0% 58.0%
EEM 211,751 33.1% 66.9%
XLF 172,894 28.8% 71.2%
GLD 141,117 57.9% 42.1%
TLT 126,380 32.3% 67.7%

The next few symbols on the ETFs list (in liquidity order, most to least) are:

FXI, DIA, USO, GDX, SLV, TBT, SDS, EWZ, XLE, TZA, and EWJ.

Volume should not be the only criteria you use when choosing investments. However, more liquidity never hurts and it can be used as one factor of many that you consider. Using Born To Sell's screener you can set the open interest filter to limit results to only those covered calls that have an open interest greater than the minimum you specify. That will help keep you out of any low volume (big spread) situations.

Note: "volume" means the number of contracts that traded in a day, while "open interest" is a measure of how many contracts exist at any given time. They are not the same but are highly correlated... If an option series has huge volume then it probably has a large open interest, too, and vice versa.

Free Trial | Covered Call Newsletter | Covered Call Blog Bookmark and Share