Using a screener

Using the screener from OptionsXpress (OX) to start a search for Credit Spread trades is relatively simple and once you have the information put into it you can save the screen and check it everyday if you would like with a couple of clicks.

As I said before this is not my favorite screener it has many limitations and I have a few dislikes about it, but it was easy to setup and it is free if you have an account with OX.

So lets get started -

Go to the Toolbox tab on the OX webpage (after you log in to your account) and click on the “screener” link.
This is where you should be…

(click on it for full size version)

OK next click on “Spreads” in the screener tabs. We are now going to input the criteria for a list of Bear Call Credit Spread with a 5 point interval between strikes that may fit our needs.

OK under Stock Criteria we want -

Price between 50 and 100
Avg Volume 100K to any
P/E from 0 to 20
Historical Volatility 20 to any

Option Criteria we want -

Expiration month - no more than 60 days out
Intrinsic Value - out of the money
Open Interest - 100 to any
Implied Volatility - 30 to any

This is what it should look like so far …

OK next for the Spread Criteria -

Call Spreads
Credit Spreads
Interval Between Strikes - 5

For Field layout Check the following -

Stock Symbol
Stock Last Trade
Option Symbol
Option Last Trade
Spread Description
Action (links to trade,chain and charts)
Natural Bid
Natural Ask
Max. Return
Max. Risk
Return % of Risk
Break Even Point
Break Even %

It should look like this….

This should give you a few trades to look over. We can tweak it a little to gain a couple more trade possibilities or lessen the amount given, depending on what appears. More on that later.

Just remeber this is only a starting point and it certainly is not a substitute for the technical analysis I have discussed or any of the other protocol I have gone through. This is a starting point the use of a screener to start to find stocks when you are first starting out. A way to start a watchlist.

Any Questions?

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