Options Trading Tutorial

How do I scan to find cheap options?

I have been subscribing to a service that provides "cheap or undervalued" stock options on stocks that historically move and have not in awhile. Is there a scanning tool - free would be nice that works online? I have and account with Optionsxpress if they have one.

Public Comments

1. If by "'cheap or undervalued' stock options" you mean options that have a high HV to IV ratio, you can use the "Options Dragon" at http://www3.optionsxpress.com/yahoo/?CMP=SPC-yhoo&src=op_drag and scan for stocks with a high HV/IV ratio. Warning: There is almost always a good reason for a high HV to IV ratio. Just because an option is "cheap or undervalued" by that criterion does not mean that it is a good option to buy.
2. I would not get caught up in "cheap" options. Learn about historical volatility and implied volatility. The link below will take you to "Options Volatility: Valuation" which you should read and then scroll down on that page to #3 and #4.
3. try ivolatility.com and also don't forget the bid ask spread. sometimes it's not worth it if the spread too wide