Most Liquid Options

by Mike Scanlin

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.

Mike Scanlin is the founder of Born To Sell and has been writing covered calls for a long time.