With the diverse nature of stock market trading, investors now have a broad spectrum of financial instruments, including shares, various funds, and indexes. They select their investment strategies based on financial goals and the desire to profit in a highly volatile market.

One popular avenue that traders pursue is options trading. While futures trading is common, the market sees many options traders who develop unique strategies daily to profit in the day-trading segment despite market volatility.

Options trading involves two main types of contracts: calls and puts. A call option gives the holder the right to buy a stock, while a put option gives the holder the right to sell a stock. Traders often use vertical spreads, combining options to leverage price movements between two levels, thereby reducing upfront costs by trading one contract to help fund another. Market turbulence can be advantageous for options, as rapid movements in underlying values can increase the value of calls and puts by locking in purchase and sale prices. Strategies like straddles and strangles allow traders to position themselves for changes in volatility.

Let’s take a look into some of the trending stocks and indices that are worth eyeing when it comes to Options Trading :

Tesla (NASDAQ: $TSLA)

Tesla has always been in the news. The last three years have seen the stock deliver solid returns to its investors through equity or derivative markets. Recently, there has been a lot of volatility in the stock, and while that hasn’t been great for investors, smart traders can continue to make a lot of money off the stock. With an average single-day options volume of approximately 1.8 million, Tesla Inc. is one of the most actively traded individual stocks for options. The ground-breaking maker of EVs (electric vehicles) has continuously led the industry with its innovative products and expansion strategies. With so much technology and innovation happening rapidly, volatility comes as a gift, and this volatility makes Tesla one of the best bets for Options Trading. 

Amazon.com (NASDAQ: $AMZN)

This e-commerce powerhouse continues transforming retail and technological landscapes. With its numerous business areas, persistent innovation, and emphasis on customer-centricity, Amazon is a popular pick for option traders. A large part of Amazon’s business is in a volatile E-Commerce sector, so it is a lucrative choice for options traders. Amazon’s ongoing pursuit of innovation and diversification, including investments in AI, healthcare, and logistics, also presents an opportunity for options traders to book profits by capitalizing on emerging trends and market upheavals. Another primary reason that makes Amazon one of the trending and emerging “options” for Options trading is the regulatory concerns around its market power and antitrust concerns. Though a concerning situation for the corporation, it can help the traders take advantage of short-term price fluctuations and increase options trading activity. With an average stock trading volume of approximately 33.4 million and its latest Q1 2024 earnings release, reporting a 216% Y-o-Y earnings increase, diving into trading options for this e-commerce giant can provide sweet returns to traders.

NASDAQ-100 Index (NASDAQ: $NDX)

There are always two types of investors in the securities market – one who likes to invest in an individual stock and the other in the entire index. It’s the same when it comes to options trading. Instead of trading in options for individual stocks, the traders trade in indices options. Nasdaq-100 index consists of the 100 most powerful non-financial companies listed on the Nasdaq stock exchange, booming in technological advancement and market growth. By tapping the opportunity of options trading on the Nasdaq-100 index, traders can capitalize on diverse industry trends and be sector-specific at the same time. Nasdaq-100 index constitutes both growth and value companies. There are always rotation periods where one of these two kinds performs better than the other due to various factors such as inflationary forecasts, changes in interest rates, statutory changes, etc. This, in turn, helps the options traders to employ rotation-based strategies and use different mechanisms such as straddle, protective put, butterfly, etc., and book profits by taking advantage of the relative strengths and weaknesses of the index. Though the single-day options trading volume tends to be on the lower side, with an average of approximately 47k, the index's strength makes it one of the safest options trading indices for 2024.

Apple (NASDAQ: $AAPL)

Apple never ceases to amaze us with its trends. It excels at providing highly innovative products to its customers and bringing something new into the market to keep up with the trend, or rather, it would be better to say, to set the trend. It is one of America's most valuable firms, with a market capitalization of more than $2.8 trillion. Usually, that type of number, that level of market cap size, and stability are unfavorable indicators for options trading. However, what distinguishes Apple is that it is highly volatile, double that of the market average. Apple provides a lovely bed for all investors, whether long-term or options traders, with an average single-day options volume of about 616k over the previous month and its sun-moon mix of stability and volatility. And the adage remains true: Apple never disappoints!

S&P 500 Index (NASDAQ: $SPX)

The S&P 500 Index, including the 500 largest publicly listed firms in the United States, is a benchmark for overall stock market performance. These corporations primarily serve as the stock market's flag bearers. People also use this index to learn about the firms' operations before betting on individual stocks in the larger market. Options trading on the S&P 500 Index provides investors with exposure to a diverse portfolio of major US firms and the ability to hedge or speculate strategically. S&P 500 Index is by far the most actively and heavily traded options indices, with an average options volume of approximately 2.9 million and implied volatility of approximately 12%. Moreover, option traders like to bet on the future performance of the market rather than any individual stock in order to hedge themselves against the risk. This is where the S&P 500 Index acts as a savior for them.  

While the above-listed stocks and indices are some of our best picks, there are others that we couldn’t skip. These five must also be on every options trader’s radar in 2024: 

• AMC Entertainment Holdings
• Gamestop Corporation
• Nvidia Corporation
• CBOE Volatility Index
• S&P 500 Mini-Spx Options Index

Options trading is distinguished by its ability to generate profits in times of volatility regardless of where the volatility goes, as options include both call and put options. It allows traders to earn big money and receive returns for their risk, but what makes it easy is a robust and analysis-backed trading technique that benefits traders in the long term. If you are new to options trading and are looking to get started with an easy to use brokerage, Public.com is quickly becoming a favorite of new traders as well as experienced traders due to its intuitive design and lower fees. As options trading can becoming quite risky, be sure to only trade a safe amount. 

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