Options Trading Thrives: Uncovering the Top Stocks for Maximum Returns
The world of options trading continues to boom, with 2024 setting a new record for options volume. While many focus on the best and worst stock performers, we’re taking a different approach – identifying the top stocks for options traders.
The Straddle Strategy: A Direction-Agnostic Approach
To uncover the most attractive options, we calculated returns on four-week straddles starting in 2024. A straddle involves buying a call option and a put option on a stock with the same strike and expiration date. This approach eliminates direction from the equation, allowing profits whether the stock rises or falls. However, the stock must sustain a direction within the four-week timeframe for the straddle to pay off.
The Importance of Sustained Direction
A significant two-week move up followed by an equally significant two-week move down can result in a big loss for a four-week straddle. Therefore, sustained direction during the holding period is crucial for profitable returns.
Top 20 Stocks for Straddle Plays
We analyzed stocks with ample option liquidity and weekly expiration dates available over the past year. Assuming a straddle purchase at the end of every week with a four-week expiration date, and holding until expiration, we ranked the top 20 stocks by average straddle return. The table below shows the results, including the percentage of positive straddles, the percentage that doubled your money, and the percentage of positive straddles due to call options.
| Rank | Stock | Average Straddle Return | % Positive Straddles | % Doubled Money | % Call Option Wins |
| — | — | — | — | — | — |
| 1 |… |… |… |… |… |
| 2 |… |… |… |… |… |
|… |… |… |… |… |… |
Consistency is Key: Top 20 Stocks by Percent Positive Straddles
While the previous list highlights stocks with the highest average returns, this list focuses on stocks whose straddles were consistently profitable. These stocks may not have earned the most money, but they turned out winners more often than others.
| Rank | Stock | % Positive Straddles |
| — | — | — |
| 1 |… |… |
| 2 |… |… |
|… |… |… |
Big Winners: Top 20 Stocks by Percent Doubled Money
Finally, we identified stocks whose straddles doubled most often. These stocks had options that were most likely to give you a big winner.
| Rank | Stock | % Doubled Money |
| — | — | — |
| 1 |… |… |
| 2 |… |… |
|… |… |… |
Software and Technology Dominate the Top 10
Notably, five of the top 10 spots are occupied by software or technology companies, highlighting their potential for options trading success.
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