The Best Stocks For Option Trading | Best Stock Strategy – Options Trading with David Jaffee
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The Best Stocks for Option Trading

New options traders can quickly become overwhelmed when researching and choosing which underlying stocks to trade options. 

Even experienced traders can struggle with narrowing their strategy and focusing on the right stocks and options to choose.

David Jaffee of teaches his students how to identify the best stocks for options trading by creating a concise watchlist. 

With the right list of stocks, options traders can feel more confident and comfortable with their trades. 

Some stocks for options trading can also help minimize risk and protect your investments. 

Keep reading to learn more about stocks for option trading and how to choose the best option trading stocks. 

Choosing the Best Stocks for Trading Options

David Jaffee considers the best stocks for trading options to be market leaders with large market capitalizations and liquid options. 

As one of the best options trading coaches, David Jaffee has taught more than 1,500 students how to create their watchlist of stocks for options trading. 

A refined watchlist of stocks can help you stay focused and avoid being swayed by breaking news or passing trends.

Focusing on market leaders with large market capitalizations and liquid options also helps minimize risk when trading options and improves your probability for profit. 

With the right options trading strategy, you can win up to 98% of your trades. 

Below are some of the companies that David Jaffee likes to trade. 

  •, Inc (AMZN)
  • Waste Management (WM)
  • JP Morgan Chase & Co. (JPM)
  • Microsoft Corporation (MSFT)
  • Mastercard Inc (MA)
  • Visa Inc (V)
  • Walt Disney Company (DIS)
  • UnitedHealth Group Inc (UNH)
  • ETFs including SPY, SCHD and QQQ

Notice that all of the companies above have strong, recognizable brands and are also market leaders. 

How to Choose Stocks for Option Trading

If you want to know how to become successful at trading options, you have to learn the best options trading strategy. 

The best options trading strategy includes choosing the right stocks and identifying your best opportunities. 

David Jaffee teaches his students how to identify market leaders and the best stocks for option trading. 

Traders do not have to spend hours researching each stock. 

Instead, they can focus on strong brands with large market capitalizations to maximize their efforts when trading options. 

Stop Researching Stocks

It is easy to fall into a research spiral, learning all there is to know about every stock. 

Too many traders experience “paralysis by analysis” when they are overloaded with information and cannot make fast decision. 

Traders can actually save a lot of time and effort by focusing on market leaders with large market capitalizations and liquid options. 

These types of stocks are widely covered by both institutional and retail traders. This means that almost all of the available information is already priced into the current market price.

Traders do not have to spend their time researching these companies or reading the latest news. 

Focus on Strong Brands

The companies listed above are some of the best stocks for option trading because they have strong, recognizable brands. 

These brands are extremely valuable, and they sell products and services that are used by large groups of people. 

The loyal customer base, highly recognizable brand, and existing platform for each company helps minimize risk when trading because these brands are more likely to weather financial storms. 

Look for Large Market Capitalization 

The GameStop story took over the news when the company’s stock soared in 2021. 

The success of the heavily shorted stock was a surprise to many and proves how easy it is for smaller companies to be manipulated. 

David Jaffee encourages his students to focus on companies with large market capitalizations, usually more than $100 billion. 

Large market capitalizations protect these companies from Reddit traders / Wall Street Bets traders. 

It is much easier to manipulate a smaller company like GameStop or AMC Theaters than a company like Amazon because significantly less money is required to increase the market capitalization of smaller companies. 

Maximize Your Efficiency 

Finally, the right options trading strategy makes the best use of your resources. 

It is more efficient and cost-effective to trade large companies and stable indices. 

The companies listed in this article that David Jaffee likes to trade all have liquid options with tight bid-ask spreads and low slippage. 

As a result, they are more efficient to trade and carry a lower risk profile. 

Even David Jaffee, an options trading genius with a large trading account, continually strives to improve his efficiency by trading large companies, indices and ETFs - he rarely trades smaller companies.

Learn the Most Successful Options Strategy 

If you are new to options trading, you may wonder if you can make money trading options

The answer is yes, but only if you have the right options trading strategy. 

David Jaffee offers a comprehensive online options trading course that provides step-by-step instructions for new and advanced traders.

You can learn how to choose the best stocks for options trading and win up to 98% of your trades. 

Visit to learn more and sign up for $400 worth of free training materials.

Frequently Asked Questions (FAQs)

What stocks are best for option trading?

The best stocks are stable with large market capitalizations.

Stocks such as AMZN, WM, DG, JPM and UNH.

Indices are also very good choices.

Trading options on indices such as SPY, SPX, QQQ and SCHD are also good choices.

Which option trading strategy is best for beginners?

Selling out of the money puts on large capitalization stocks and indices is best.

Watch the video below for more information.

What is the most successful options trading strategy?

I discuss that in this blog post about the most profitable and successful options trading strategy

What indices and ETFs are best to trade options?

SPX, SPY, QQQ, RUT, SCHD and VOO are best to trade options.

The cash settled options are 1256 Contracts and receive preferential tax treatment as well.

Do all stocks have options?

No, not all stocks have options.

Most larger stocks (above $50 billion market capitalization) have options that are tradable.

Even so, it's best to focus on the largest companies because options without a lot of volume are prone to slippage.

About the Author David Jaffee

I (David Jaffee) help people become consistently profitable traders while minimizing risk. I graduated from an Ivy League University and worked at some of Wall Street's most successful investment banks. Subscribe to my YouTube channel for valuable videos - BestStockStrategy YouTube Channel​. Finally, if you're looking to Land a Finance Job, then I've put together the best step-by-step course at My personal website is

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