Option Ideas Purpose
The new experience allows you to identify the highest-ranking option strategies across bullish and bearish objectives. You can customize the report by objective, strategy type, timeframe, and risk profile, then review ranked options strategies based on key metrics such as probability of profit, risk/reward, breakeven, return potential, liquidity, implied volatility.
This tool is powered by OptionsPlay and uses their proprietary OptionsPlay score to easily compare strategies against each other. The result is a structured workflow for identifying which securities may offer the most attractive options strategy candidates within a Dorsey Wright-aligned universe. Options Ideas helps you move from technical research to options strategy evaluation more efficiently. The experience aligns each options strategy with the appropriate Dorsey Wright technical view.
Report Filters
Options Ideas is designed to help users find options strategies that align with Dorsey Wright’s directional view, split into bullish and bearish tabs. Bullish strategies are surfaced on securities identified through Dorsey Wright’s relative strength and point-and-figure process as stronger or more favorable. Specifically, these include securities with Technical Attribute ratings/Fund Scores of 3 or higher. Bearish strategies are aligned with securities that meet Dorsey Wright’s bearish or weaker directional criteria. These include securities with Technical Attribute ratings/Fund Scores below 3.
Customize the Experience to Match Personal Preferences
Every options user has different preferences. Some prioritize income. Others prefer defined-risk directional exposure. Some want shorter-dated strategies, while others prefer longer timeframes. Some may favor more conservative risk profiles, while others may look for higher-return opportunities.
Options Ideas allows users to customize the report based on their preferences, including:
- Objective- Income or Speculative
- Strategy type- Only available when the speculative objective filter is selected, this allows you to filter between trend-following or contrarian strategies
- For Bullish strategies, select High RS for trend-following and Oversold for contrarian strategies
- For Bearish strategies, select Low RS for trend-following and Overbought for contrarian strategies
- Timeframe
- Risk profile
- Security Type
The report then ranks the strategy candidates based on those selected preferences.
Rank Option Strategies from Most Attractive to Least Attractive
Options Ideas does more than list potential options trades. It ranks options strategy candidates so users can quickly identify which symbols may offer the most attractive options opportunities within a selected universe.
The ranking process incorporates key options metrics such as risk/reward, probability of profit, breakeven, return potential, liquidity, implied volatility, and OptionsPlay Score.
This helps users focus their attention on the strongest options strategy candidates first.
Options Strategy Details
To view the details of the suggested option contract for a given ticker, click anywhere in that ticker's row to expand the detail view. This will show information such as the strike price, expiration date, and other relevant data related to the option contract. This section also includes a plain English description of the suggested strategy.
If the suggested strategy involves more than one leg, the details section will show information for both contracts required to properly employ the strategy.
Glossary of Terms
Cost- The net premium of the contract(s) associated with the suggested option strategy
Breakeven- The price of the underlying security must reach in order to recoup the cost of the option strategy. The breakeven price is calculated as follows for each strategy:
- Put- strike price - (option cost/100)
- Long Call- strike price + (option cost/100)
- Covered Call- current price - (option cost/100)
- Call Spread- lower strike price + (option cost/100)
- Put Spread- higher strike price - (option cost/100)
Percent Price to Breakeven- Return required for the underlying security to reach the breakeven price from its current share price. For a bearish strategy, a positive value means the option strategy is currently in the money. For a bullish strategy, a negative value means the option strategy is currently in the money.
Max Reward- The maximum potential benefit of following the suggested option strategy. The max reward is calculated as follows for each strategy:
- Short Put- option cost
- Long Put- (strike price x 100) - option cost
- Long Call- theoretically unlimited
- Covered Call- (strike price - current price) x 100 + option cost
- Bullish Call Spread- (higher strike price - lower strike price) x 100 - option cost
- Bullish Put Spread- option cost
- Bearish Call Spread- option cost
- Bearish Put Spread- (higher strike price - lower strike price) x 100 - option cost
Max Risk- The maximum potential loss associated with following the suggested option strategy. The max reward is calculated as follows for each strategy:
- Short Put- breakeven price x 100
- Long Put- option cost
- Long Call- option cost
- Covered Call- (current price x 100) - option cost
- Bullish Call Spread- option cost
- Bullish Put Spread- (higher strike price - lower strike price) x 100 - option cost
- Bearish Call Spread- (higher strike price - lower strike price) x 100 - option cost
- Bearish Put Spread- option cost
Probability- The probability the underlying security surpasses the breakeven price by the option expiration date.
Expiration Date- The last date on which the option can be exercised
Pay attention to whether the underlying security will have an earnings announcement before the option expiration date as this can greatly impact the price of the underlying security and, as a result, the profitability of the option strategy.
OptionsPlay Score- The OptionsPlay Score measures the expected value of an options strategy by weighting its probability of profit against its risk-to-reward ratio. A Score of 80-100 is the breakeven line, near-zero expected value. Above 100 indicates positive expected value, meaning the odds favor the trader relative to the risk. Below 80, expected value turns negative. The Score can theoretically reach 250, but strategies rarely exceed 130–150 in practice.
Bid/Ask Spread- A measure of the liquidity of the underlying security, presented as a percentage so it is standardized across underlying securities with different share prices. Calculated as (ask-bid)/bid.
Delta- A measure of the sensitivity of the option price to a change in the price of the underlying security. Represented as a number between -100 and 100. The further in the money an option is, the closer to -100 (for a put) or 100 (for a call) the option will be.
Gamma- A measure of the sensitivity of an option's delta to a change in the price of the underlying. A higher gamma indicates a more volatile option price.
Implied Volatility- A forward-looking measure of the volatility of the underlying security.