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Cheap or expensive? Options, ranked

The cheapest reads first: each option's implied volatility against the stock's own realized volatility. Below 1.0 reads cheap; at 1.1× the higher read or more reads rich.

Cheap–

Fair–

Rich–

Today's best reads

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Reading the list…

Only year-out at-the-money calls have tested well; everything else here is a pricing read, not a signal.

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Symbol	Option	Expiry	Strike	Delta	IV	IV / realized	Verdict	Bid	Ask	Breakeven move	Spread
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How we tested this

The read

Every name's at-the-money call and its 10-delta call and put, priced by implied volatility against the stock's own realized volatility (the lower of the last year and the last 3 months). Below 1.0, the option prices less movement than the stock has been making: cheap. At 1.1× the higher read or more: rich.

What the tests found

"Cheap" alone has not paidOur pre-registered test (2016–2026, 20 liquid names) bought options whenever they read cheap and compared them with buying every month. No version beat the baseline. Treat the label as a price check, not a signal.

One test passed: year-out calls at 0.9× or lessThe one cell that held up was re-tested on 87 names the first test never saw. A year-out at-the-money call bought at 0.9× realized or less made +0.62 per option more than buying the same call every month (2016–2026, held to expiry; +0.45 from 2022 on). But 34% of those calls still lost the whole premium, and it is one decade in which most of these stocks rose. Puts at the same reading did worse and are never marked. Rows that qualify are marked R1 edge.

Rules of thumb

Compare like with likeAn ETF holds many stocks, so its realized volatility is lower and its options read richer than a single stock's. Rank ETFs against ETFs and stocks against stocks.

Wide spreads hide the priceA cheap read on a quote whose spread is 20% of its price or more (marked amber) may not be cheap at the price you can trade.

Earnings are inside the IVImplied volatility before a report includes the expected earnings move. A name reporting before expiry will read richer for that reason alone.

Wings follow listed strikesThe wing is the listed strike nearest 10 delta. Where strikes are far apart it can land at 0.2 or more: read the delta column.

How this is computed

Computed from live option quotes and daily closes, refreshed at most every 15 minutes; after 4:00 PM ET the quotes are the closing marks. IV is Black-76 on each expiry's put-call parity forward. Option quotes are live bid/ask, for reference only.

Cheap or expensive? Options, ranked

Today's best reads

Ranked, cheapest first

The read

What the tests found

Rules of thumb

How this is computed

Put these signals to work