Our Methodology: The 5-Pillar Options Scoring System

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.

Read the full Value guide

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.

Read the full Sentiment guide

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.

Read the full Activity guide

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.

Read the full Liquidity guide

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.

Read the full Timing guide

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.

Backtested Signals

We don't ship a signal until it survives an honest backtest — and we tell you where each one fails, not just where it works. Two of our headline signals come with more than a decade of point-in-time history behind them.

Gamma Walls

We backtested gamma walls on every optionable ticker since 2012, plus a decade-long, point-in-time walk-forward on the most liquid names. The durable finding is the hedge wall's volatility regime: forward realized volatility ran meaningfully higher below the hedge wall than above it — statistically significant over a decade, positive on every name we deep-tested, and durable in calm and stressed markets alike.

What doesn't work: the regime is name-specific — for roughly 1 in 3 tickers it inverts — and the walls are zones, not bounce lines (a displaced put wall bounces around 60% of the time; shorting the call wall is close to a coin-flip). So we don't sell a universal "gamma wall strategy." We grade reliability per ticker and tell you when to trust the regime, flip it, or ignore it. Full accounting: Gamma Walls Explained.

Informed Accumulation

Our informed-accumulation detector is validated across 14 years of options tape (2012–2026). Accuracy is concentrated at the highest alert tiers — the large majority of top-tier flags preceded a real, outsized, stock-specific move — while middling readings carry no durable edge, which is why we don't publish them.

What doesn't work — and we show it: we publish the misses, including false-positive classes like squeeze mechanics (GME) and crypto-beta proxies (MSTR) that trip the raw signal with no information edge. The detector proves only that anomalous positioning preceded a documented event — never who traded or why. Full accounting: Informed Accumulation Explained.

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.