Monitoring and analyzing the current position of financial assets is key for profitable futures and option trading. While qualitative analysis is important to choose the right derivative trade, it is equally necessary to consider quantitative aspects.
You can do that using an F&O stock. If you are new to using screeners, don’t worry. Here we talk about why you should consider a screener and how to use it for F&O trading!
Why Use a Screener for Futures and Option Trading?
F&O stock screeners or screeners for other underlying assets provide in-depth analysis of a variety of stocks (underlying assets) using multiple indicators. It takes away the scope of behavioral biases by delivering pure numerical data about securities on your screen.
Leading trading platforms like Dhan offer a full-fledged screener for option trading in many underlying assets including over 198 stocks. The best part? You can also access it at the convenience of your mobile screen through an app.
Now that you know the core use of an F&O screener, here is how to use it for smart trading.
How to Use F&O Stock Screener for Trading?
Using an F&O screener basically provides your next derivative trading idea based on technical and financial data. To start, you will need to find the screener on your online trading platform. It should be in the futures and option trading section of the portal. After you have found it, here is how you can use it for F&O trading.
1. Check Real-Time Data
Time is of the essence when trading in derivatives. Screeners come equipped with stock market data analysis that updates in real-time. This helps you spot futures and options contracts that are suitable for your next trade.
2. Analyze Technical Indicators
If you want to consider more than just current performance to trade F&O, screeners also enable filtering the contracts using multiple technical indicators. For example, you can sort through options that are most active by volume (Volume Gainers), surging or lagging outstanding contracts (OI Gainers and losers), gaining or losing value daily (Price gainers and losers) etc. This makes your job easier.
3. Trade on Chains
Found an asset you like but prefer more choice? You can access futures or option chains through the screener to find a list of available contracts. Just click on a security and it would showcase all the information on calls, puts, expiration dates, volume, strike price, and more. It helps you become hyper-focused on your derivative trading.
4. Buy/Sell at One Click
Screeners allow you to find the best calls and puts depending on indicators and your trading goals. Once you have selected one, you can buy or sell at one click through the screener. If you are a high-volume trader, you can even place basket orders.
5. Craft a Trading Strategy
Using a screener will enable you to assess the performance and potential of your chosen financial asset so that you can craft and execute a custom trading strategy for maximum profitability. Prepare your F&O trades in advance to trade smartly and efficiently!
F&O screeners can be useful for traders to find new trading ideas that are backed by technical and financial data. You can use it in combination with option chain and trading strategies to take your derivative trading up a notch. Dhan provides an excellent option screener where you can do all that and more!