Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.
Table of Contents
An options screening tool helps traders select available contracts by filtering them according to certain criteria. They break down the universe of available contracts into a manageable list based on what the trader defines.
An options screener tool can help traders set goals, take a first pass at screening potential options, and set specific strategy-specific objectives. There are free and paid tools that offer different levels of sophistication and capabilities. Here’s how to use an options screener to go from a blank screen to a list of actionable options candidates.
Key Points
• Options screening tools filter the number of available contracts in the market by criteria like delta, implied volatility, and expiration.
• Core options screening filters include option type, strike price, days to expiration, delta range, implied volatility, liquidity filters, and upcoming events such as earnings dates.
• Preset screens offer a fast starting point, while custom filters allow more precise control over which contracts appear in results.
• Different strategies (covered calls, cash-secured puts, credit spreads, and long calls or puts) call for different screener settings.
• Options screener results are a starting point for analysis, but they are not a substitute for evaluating individual contracts and their risk profiles.
What Is an Options Screening Tool?
An options screener is a filter-based tool that’s often available through brokerage platforms. It can assist with options trading by searching the options market based on specific parameters, rather than having to browse contracts manually.
Most screeners filter by a few common criteria: these include the underlying asset, contract type (calls vs. puts), expiration, strike price, key Greeks like delta, implied volatility, and liquidity filters like volume and open interest.
The majority of platforms offer two modes: preset screens, consisting of pre-built filter combinations that are organized around common strategies, and custom screens, which provide full control over each variable and are better suited to traders with a defined approach. Pre-built filters tend to be faster, while custom screens are more precise. Neither is better than the other, however — it all comes down to personal preference and strategy.
Before You Start, Define Your Investing Goal
Screeners are only as useful as the clarity of the goals they’re serving. Without a clear objective, results may be overwhelming and hard to act upon in a meaningful way for an options trading strategy. There are a few primary options screening strategies to consider before diving in.
Income Strategy
The goal of an income strategy is to generate income by selling options for premium. Common approaches include using covered calls and cash-secured puts. The options strategy screener for income strategies tends to prioritize elevated implied volatility, relatively shorter expirations, and out-of-the-money strike prices.
Directional Strategy
The goal of the directional strategy is to profit from anticipated price movement from call or put options: buying calls when traders are bullish, and buying puts if they’re bearish. These screener approaches for buyers may prioritize delta range, time to expiration, and liquidity. Bear in mind that there’s a risk of losing the full premium paid if the anticipated move doesn’t materialize.
Hedging Strategy
Hedging strategies look to offset risk in an existing position, rather than generate standalone profit. This strategy may involve buying puts to hedge a long stock position, for example. Screener settings that focus on hedging may select a put with a delta that offsets the risk in the existing stock position, and with enough time before expiration for the hedge to have the potential to be effective.
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Choosing What to Screen For
An options contract screener typically lets traders filter across two dimensions: the underlying stock’s characteristics, and the options contract’s own characteristics. Both of these factors matter. However, starting with the underlying criteria can help narrow the contract-level search.
Underlying Stock Criteria
There are several criteria options screener filters can use. These include market cap, sector, price range, average daily volume, and upcoming earnings reports. For instance, traders screening for covered calls may want to filter for stocks they already own, or that they would be comfortable owning. These underlying criteria may help ensure the contract-level results are attached to assets that actually fit the trader’s portfolio, risk tolerance, and options trading strategy.
Options Contract Criteria
The contract-level filters — expiration, strike, delta, implied volatility, open interest, and bid-ask spread — are where most of the options-specific screening happens. Knowing which contract-level criteria matter most, and why, may separate a useful screen from one that returns a hundred contracts with few actionable insights.
Recommended: The Greeks in Options Trading
The Core Filters Every Options Screener Should Include
Not every screener offers the same filter set, but these six are worth prioritizing when evaluating or configuring any options screening tool. The best options screener settings depend on your goals, but here are some of the most common — and often most useful — options screener filters to use.
Option Type
The option type filter — call or put — establishes the direction of the trade, and is generally the first options parameter a trader sets before using other options filters in the screener. Calls are used when an underlying asset’s position is bullish; puts are for bearish conditions or when the trader’s goal is downside protection.
Expiration / Days to Expiration (DTE) Range
Days to expiration (DTE) counts how long an option has until it expires. Depending on their strategy, some income sellers might target 30 to 45 DTE, for example, while directional buyers may look further out to give the trade time to develop. Shorter DTE means faster theta decay, which may benefit sellers while working against buyers.
Delta Range
Delta measures how much an option’s price may change for every $1 move in the underlying stock, functioning as a rough proxy for the probability of an option expiring in-the-money (ITM). Income sellers might look for options with lower delta, since they may theoretically have a higher probability of expiring out of the money and worthless, while directional buyers might target higher delta.
Implied Volatility (IV) / IV Rank
Implied volatility (IV) reflects the market’s expectation of future price movement, which directly affects the option’s premium. IV Rank (IVR) represents the current IV as a percentile that’s relative to the IV range over the past 52 weeks. High IVR may favor sellers, who could collect richer premiums, while low IV Rank may favor buyers, who could pay less for the same exposure.
Liquidity
Liquidity is an important factor in terms of potential returns. Illiquid options tend to carry wide bid-ask spreads that may erode potential returns. When shopping for a contract, it may be beneficial to look for high open interest and daily volume, as these may both signal that other traders are actively buying and selling that option. A tight bid-ask spread is another green flag.
Earnings Date Filter
Earnings announcements may result in sudden, sharp stock price movements and IV. Traders who want to avoid this uncertainty may filter out contracts with earnings events that fall within the expiration window. Others may screen specifically for pre-earnings setups, but this carries meaningful additional risk.
How to Run Your First Options Screen
Running an options screen for the first time can feel overwhelming, but breaking the process down into a few discrete steps makes it more manageable. Here’s how to go from a blank screen to a list of potential options.
Step 1: Choose a platform. Select a reputable options screening tool that matches your needs, including core options trading filters and support for strategies you’re interested in pursuing. Some major platforms have one built in, but standalone tools may offer more filtering options.
Step 2: Set the underlying asset. Start with a stock or asset already on a watchlist, or use an index or sector filter to narrow where you start.
Step 3: Define the strategy goal. Select a call or put and determine whether the intent is to buy or sell. This shapes every filter that follows.
Step 4: Apply the core filters. Set your core filters, such as DTE range, strike price, delta range, and minimum liquidity thresholds. You may want to add IV or IV Rank filters at this stage depending on your goal.
Step 5: Review and refine results. A well-configured screen should return a manageable list. If results are too broad, tighten the filters. If too narrow, widen DTE or delta range.
Step 6: Evaluate individual contracts. Use the results as a starting point, not a final answer. Verify the bid-ask spread is tight enough to enter and exit efficiently; check open interest; confirm no earnings fall within the expiration window; and assess whether the risk/reward — maximum gain, maximum loss, and breakeven — aligns with the plan. You may also wish to filter for earnings announcement dates.
Screener Strategies
The best options screener settings depend on an investor’s goals and the strategy being used. Here are examples of potential starting-point screener settings for four common options strategies. Keep in the mind, however, that configurations can vary significantly depending on the investor and the trade.
Covered Call Screener Settings
Goal is income: The trader owns shares of the underlying asset and sells a call option against them to collect premium. Depending on their goal, a seller may wish to screen for calls with lower delta ranges and relatively shorter expirations, as well as elevated IV Rank, liquid contracts, and underlying stocks that are already held or on your watchlist.
Cash-Secured Put Screener Settings
Goal is income / stock acquisition: A trader sells a put while holding enough cash to purchase shares if assigned. As with covered calls, the seller might screen for puts with lower delta ranges and shorter DTE, as well as high IV Rank, no earnings within the expiration window (unless intentional), and underlying stocks that the trader would be comfortable owning at the strike price.
Credit Spread Screener Settings
Goal is income or defined risk: The trader sells one option and buys another at a different strike to cap both gains and losses. The screener settings may vary depending on the credit spread, goals, and risk level. For example, a trader might screen for 20 to 35 or 30 to 45 DTE, depending on their strategy, a shorter leg delta, net credit received, adequate liquidity in both legs, and elevated IV Rank on the underlying asset.
Long Calls / Long Puts Screener Settings
For directional trades: A trader may buy a call or put in anticipation of a significant price move. They might screen for a relatively higher delta range and longer expiration, as well as lower IV environments (so premium isn’t inflated) and high liquidity.
Limitations of Options Screeners
Options screeners may be a useful starting point for evaluating options, but they can have limitations that traders may want to keep in mind before acting.
First, options screeners only provide current and historical market data. They display contracts that meet the criteria at a given moment, but they can’t predict what an underlying stock might do next. For example, a high IV Rank signals that premiums are elevated relative to recent history, but it doesn’t dictate which direction the stock may move.
Market conditions, IV, and liquidity may shift quickly, so a backward-looking screener result that looked a certain way an hour ago may look very different than at present.
Also, options screener results that match your filter criteria may not necessarily be the right fit for your personal trading strategy overall. Account size, existing positions, and your risk tolerance all matter in ways no screener can account for.
Free vs Paid Options Screening Tools
The right options trading screener can depend on the trader’s experience level, the complexity of their strategy, and how important real-time data accuracy is.
Free Platforms
Major brokerages may include a basic screener at no additional cost for account holders. These typically cover standard filters, such as option type, expiration, and strike, with real-time data. Greeks and IV Rank data may be limited or absent on free tiers, however.
Paid Platforms
Dedicated options screening tools, as well as premium tiers with brokerages, may offer deeper filter sets. These may include the probability of profit metrics, IV Rank, multi-leg strategy scanning, and real-time alert capabilities. Paid tools may make more sense for traders who screen frequently and rely heavily on Greeks or advanced volatility data in their decisions.
The Takeaway
Options screeners can be helpful tools for informing trading decisions. A well-configured options screener can filter a large number of available options down to a manageable list of potential candidates for a defined strategy, making options trading more efficient.
However, options screener results aren’t the only information to take into account for options trades. The contracts a screener surfaces still need to be evaluated individually with an eye toward risk/reward, liquidity, and how they fit into a broader portfolio.
SoFi’s options trading platform offers qualified investors the flexibility to pursue income generation, manage risk, and use advanced trading strategies. Investors may buy put and call options or sell covered calls and cash-secured puts to speculate on the price movements of stocks, all through a simple, intuitive interface.
With SoFi Invest® online options trading, there are no contract fees and no commissions. Plus, SoFi offers educational support — including in-app coaching resources, real-time pricing, and other tools to help you make informed decisions, based on your tolerance for risk.
Explore SoFi’s user-friendly options trading platform.
FAQ
Which filters matter most for options screening?
Delta, implied volatility (or IV Rank), days to expiration, and liquidity — which is measured by open interest and bid-ask spread — are some of the more common filters traders may use to determine a contract’s suitability. The filters that are most useful depend on a trader’s strategy, however, such as whether the goal is income generation, directional speculation, or hedging.
What delta should I use when screening options?
Income-focused strategies, such as covered calls and cash-secured puts, might use a lower delta range, since a lower delta may signal a greater probability of an option expiring out of the money. Directional strategies that involve buying calls or puts may target higher deltas, which may theoretically reflect a higher probability of finishing in the money.
How do I avoid illiquid options contracts?
Filtering for a minimum open interest (often 100 contracts or more), and checking that the bid-ask spread is narrow, may help identify contracts that have adequate liquidity. High daily volume relative to open interest can be another indicator that a contract is actively traded.
Are free options screeners good enough?
Free screeners may be a reasonable starting point, particularly for traders who use simpler strategies. Free tools may come with delayed pricing and limited access to metrics, however, which may matter more for complex strategies.
Photo credit: iStock/JLco – Julia Amaral
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