what is optionable stock 
an optionable stock is one where the shares have the necessary liquidity and volume such that an exchange lists that stock s options for trading in order for a stock to be optionable exchanges mandate that certain criteria be met including a minimum share price number of shares outstanding and minimum unique shareholders among others understanding optionable stocksan optionable stock is one that has options listed and tradable on a market exchange not all companies that trade publicly on stock markets have exchange traded options this is due in part to certain minimum requirements that need to be met such as a minimum share price and minimum amount of outstanding shares currently there are almost 6 000 companies with optionable stocks as well as several hundred more exchange traded funds etfs with listed options 1 a stock being optionable allows investors to purchase options on the underlying stock giving them the right to buy or sell shares of that underlying stock at a set price if a stock is not optionable it is more difficult to hedge positions in that stock which makes it harder to mitigate the risks involved for stocks like these an investor can arrange for an over the counter otc options contract to be written with their broker dealer it is quite easy these days to look up online if a stock has listed options on it or not the easiest way to check whether a stock is optionable is to go to the cboe options exchange website and check whether there are options listed for a particular stock 2requirements for stock to be optionablein order to have options listed for a stock it must meet certain criteria under current cboe rules there are five primary criteria that a company must meet before options on its stock can be traded on the options exchange 3if a company does not meet any one of these criteria options exchanges like the cboe will not allow any options to be traded on the underlying security additionally because of the second condition listed above a company cannot have options traded on it until at least three months after its initial public offering ipo date 3investopedia does not provide tax investment or financial services and advice the information is presented without consideration of the investment objectives risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors investing involves risk including the possible loss of principal 