Our Methodology: The 5-Pillar Options Scoring System
How Options Pilot evaluates every stock across Value, Sentiment, Activity, Liquidity, and Timing to find the best options opportunities.
Options Pilot evaluates every optionable stock across five independent pillars, each scored from 0 to 100. Together, these five dimensions give you a complete picture of options market conditions for any ticker — not just whether to trade, but how conditions favor different strategies.
We score 4,000+ stocks across all five pillars every trading day before market open. Every score is transparent: you can see exactly which sub-checks passed and which failed. No black box.
The Five Pillars
Value (25% weight)
Core question: Are options priced fairly right now?
The Value pillar analyzes implied volatility relative to historical norms to determine whether options are cheap, fair, or expensive. Key metrics include:
- IV Rank — Where current IV falls within its 52-week range
- IV Percentile — Percentage of days IV was below current level
- IV/HV Ratio — How much you're paying relative to actual stock movement
- Term Structure — How IV varies across expiration dates
- Volatility Skew — How IV differs across strike prices
- Sector Relative IV — How IV compares to sector peers
A high Value score means options are cheap relative to history — favorable for buyers. A low Value score means options are expensive — favorable for sellers.
Sentiment (20% weight)
Core question: What are options traders actually betting?
The Sentiment pillar goes beyond the simple put/call ratio to measure signal clarity from options flow. Key metrics include:
- Flow Direction — Net sentiment strength from volume data
- OI Skew — How open interest tilts toward calls or puts
- Volume-OI Alignment — Whether volume and open interest agree
- Conviction Quality — DTE distribution and flow quality
- OI Momentum — Whether positions are growing or shrinking
- Smart Money Flow — ITM/ATM weighted flow analysis
- Sector Relative — How sentiment compares to sector peers
A high Sentiment score means clear signal from options flow — trade with confidence. A mid-range score means mixed signals — consider waiting.
Activity (20% weight)
Core question: Is something unusual happening?
The Activity pillar detects unusual options activity that may signal institutional positioning, upcoming catalysts, or informed trading. Key metrics include:
- Volume Surge — Current volume versus 20-day average
- OI Build — 5-day open interest change
- Strike Concentration — How focused activity is on specific strikes
- Multi-Day Persistence — Whether elevated activity is sustained
- Trade Quality — Presence of institutional-size trades
- Execution Urgency — Whether trades are hitting the ask aggressively
A high Activity score means unusual activity detected — investigate immediately. A neutral score means nothing unusual — consider waiting for a better setup.
Liquidity (20% weight)
Core question: Can you trade this efficiently?
The Liquidity pillar evaluates execution quality and trading costs. Key metrics include:
- Bid-Ask Spread — ATM spread as a percentage of option price
- Open Interest — Depth of outstanding contracts
- Daily Volume — Number of contracts traded per day
- Order Book Depth — Contracts available at best bid/ask
- Strike Coverage — Number of liquid strikes available
- Execution Quality — Estimated slippage for various order sizes
A high Liquidity score means tight spreads and efficient execution. A low score means wide spreads that eat into returns — size down or find a more liquid alternative.
Timing (15% weight)
Core question: Is now the right time to trade?
The Timing pillar assesses whether current conditions favor entry or if you should wait. Key metrics include:
- Event Proximity — Days until earnings, FOMC, CPI, and other catalysts
- Theta Decay Rate — Daily time erosion at various DTEs
- Term Structure Shape — Contango, backwardation, or flat
- IV Percentile Position — Where IV sits relative to its range
- Gamma/Pin Risk — Open interest concentration near current price
- Flow Momentum — Directional consistency of recent flow
A high Timing score means favorable conditions for entry. A low score means event risk is elevated — consider waiting or adjusting your strategy.
How Scores Combine
Each pillar produces a score from 0 to 100 using percentile-based ranking. The overall assessment uses a hybrid weighting system:
- Ticker-relative (50%) — How the stock's current conditions compare to its own history
- Sector-relative (30%) — How the stock compares to peers in the same sector
- Universe-relative (20%) — How the stock compares to 4,000+ optionable stocks
This three-layer approach ensures that context is always preserved. A tech stock with 40% IV might be cheap for tech but expensive for the overall market. Our scoring captures both perspectives.
Pillar Weights
| Pillar | Weight | Rationale |
|---|---|---|
| Value | 25% | Pricing is the foundation — overpaying destroys returns |
| Sentiment | 20% | Flow direction provides actionable signal |
| Activity | 20% | Unusual activity often precedes major moves |
| Liquidity | 20% | Execution costs are a real drag on returns |
| Timing | 15% | Event awareness prevents avoidable losses |
Data Freshness
All scores are calculated daily before market open using end-of-day data from the previous trading session. This includes:
- Options volume, open interest, and pricing data
- Implied and historical volatility calculations
- Earnings and economic event calendars
- Sector and universe-level percentile rankings
Scores are available before the market opens so you can plan your trading day with a complete picture of conditions across all five dimensions.
What Scores Are Not
Our scoring system is an analytical framework, not a crystal ball. Scores do not predict stock direction or guarantee profitable trades. They assess conditions — telling you whether the options market environment is favorable for the type of strategy you're considering.
A high overall score means conditions are favorable across multiple dimensions. A lopsided score tells you where the risks are. And sometimes the most valuable signal is "no clear edge" — telling you to wait for a better setup.
This is analysis, not investment advice. Options trading involves substantial risk and is not appropriate for all investors.