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What Is an Option Screener?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 22 September 2016
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    2003-2016
    Conjecture Corporation
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An option screener is a resource that is utilized in the task of evaluating the feasibility of trading options, based on the specific criteria related to those options, and information regarding the movement of the marketplace. The purpose of the screener is to aid investors in identifying securities and other types of options that are a good match for their particular investment goals, and that are have a relatively high rate of probability in terms of producing the type of return that the investor would find equitable. There are a number of option screener tools on the market today, providing investors with ready access to information about different opportunities based on their personal preferences.

While there are exceptions, many option screener programs focus primarily on securities that are traded on exchanges based in the United States. This is generally considered a feasible approach, given the composition of the marketplace within the US. Other option screener options are available that tend to focus on investments traded in UK markets or other selected markets around the world.

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The criteria used by an option screener will vary somewhat, although just about every product does rely on specific information pertaining to the marketplace. Historical data regarding past performance of key options is easily obtained with this type of tool, along with projections on future movement of the options within the marketplace. A screener will also gather data like the current strike price, the share price, and the trading volume related to the options. Essentially, a viable screener will collect all the data required by the investor to make an informed decision.

In actual practice, the investor uses the filtering tools offered by the option screener to focus in on investment opportunities that are likely to be a good match. Many of the screeners available today can help investors narrow the results based on volatility, current pricing, projections on future performance in the short and the long term, or even based on the location of the company that issues the securities. While an option screener does simplify the task of identifying viable investments, it is important to note that investors should still research options before choosing to buy, as well as discuss the options with a broker or dealer before proceeding. Doing so can often help to confirm the data generated by the screener, or provide the investor with additional information that should be considered along with the previously collected data.

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