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THE BEST STOCKS FOR WEEKLY OPTIONS

by Amanda Harvey
June 04, 2021

The best stocks for weekly options meet a number of criteria, and these factors are vital to consider when choosing which weekly options to trade. While there are certain stocks that are frequently great for trading weekly options, and that we use often for our trading alerts, the  combination of what makes a weekly option ideal to trade at any given moment is an ever-changing scenario.



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THE IMPORTANCE OF VOLATILITY

The best stocks for weekly options are those that are experiencing a significant amount of volatility, or fluctuation in price. If the price is not changing much, it will be very difficult to make a profit on the trade. Especially when you factor in the cost of entering the trade, a sluggish price is clearly an enemy to making money on trading weekly options.

Even if the stock is usually fairly volatile, it is vital for you to use up-to-the-minute information on price movement to make sure that the price is likely to be fluctuating enough within the short time-frame of your trade.

With a longer duration options contract, there is more leeway for the price to hover and then resume moving before the contract expires. However, when trading weekly options, you only have a very short length of time to attain an increase with each trade.

THE BEST STOCKS FOR WEEKLY OPTIONS HAVE HIGH VOLUME

In choosing the best stocks for weekly options, the importance of high volume cannot be overlooked. For one thing, volume drives volatility, and as discussed in the previous point, volatility is vital for winning trades. When there is a lot of activity in terms of buying and selling options contracts, this ensures that the price is constantly moving, which provides the best possible likelihood of obtaining the desired amount of profit within the time-frame.

High volume also helps to ensure that there will be buyers ready to take a contract off your hands when you are ready to sell it. It is possible that a price may undergo big changes, but that due to a lack of volume, you could be unable to sell your contract for the market price, or your desired price.

THE BEST STOCKS FOR WEEKLY OPTIONS BASED ON SECTOR

There are certain sectors in which stocks generally tend to offer good conditions for trading weekly options. Our weekly options advisory service membership focuses strongly on stocks within the sectors of technology and healthcare. The stocks of many companies within these sectors frequently experience high volume, lots of volatility and new developments, which act as catalysts for great weekly options trades.

cATALYSTS

The best stocks for weekly options are those that are likely to experience a dramatic price movement due to an impending event.

These catalysts include earnings reports, major deals made between companies, analysts ratings, and

General conditions in the marketplace can greatly boost the viability of a stock for options trading opportunities.

Recent examples of this include the demand for online healthcare which has seen companies such as Teladoc experiencing significant growth.

The increase in the need for cyber-security has allowed companies like CrowdStrike to perform at a level that has made their stock a great choice for trading weekly options.

in conclusion

When choosing the best stocks for weekly options, bear in mind that while there are certain elements that can make certain stocks a generally good bet, trading weekly options successfully requires up-to-the-minute research and awareness of the ever-changing market landscape.



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