The S&P 500 index and its corresponding ETF — SPX and SPY respectively — are the most liquid underlyings that you can trade.
But does that mean that all individual equities that are members of the S&P 500 are liquid?
If you are just buying or selling the stock, then yes any of them would be liquid.
However, if you are trading options, then the option liquidity and the spread between the bid price and the ask price will be a factor.
The TastyWorks platform provides an options liquidity measure that ranks liquidity from one star to four stars with four stars being the most liquid.
Not all stocks in the S&P500 are liquid enough to ideally trade options with.
For example, Transdigm Group (TDG) has only one-star liquidity, which is not liquid enough for options trading.
Fortunately, there are 58 symbols that are part of the S&P 500 that has the most liquid rating of four stars. And 145 more that has three star rating.
Members of S&P 500 with Four Star Liquidity
| Symbol | Company | Sector |
| AAL | American Airlines | Industrials |
| AAPL | Apple | Technology |
| AMD | Advance Micro Devices | Technology |
| BAC | Bank of Americal | Financial |
| BMY | Bristol-Myers Squibb | Healthcare |
| C | Citygroup | Financial |
| CCL | Carnival Corp | Consumer Cyclical |
| CMCSA | Comcast | Communications |
| CSCO | Cisco | Technology |
| CVX | Chevron | Energy |
| DAL | Delta Airlines | Industrials |
| DIS | Disney | Communications |
| DISCA | Discovery | Communications |
| DISCK | Discovery | Communications |
| DOW | Dow Inc | Basic Materials |
| F | Ford Motor Company | Consumer Cyclical |
| FB | Meta Platforms | Communications |
| FCX | Freeport-McMoRan | Basic Materials |
| GILD | Gilead Sciences | Healthcare |
| GIS | General Mills | Consumer Defensive |
| GM | General Motors | Consumer Cyclical |
| HBAN | Huntington Bancshares | Financial |
| HPE | Hewlett Packard | Technology |
| INTC | Intel | Technology |
| JNJ | Johnson & Johnson | Healthcare |
| JPM | JPMorgan Chase | Financial |
| KMI | Kimco Realty | Real Estate |
| KO | Coca-Cola | Consumer Defensive |
| LUMN | Lumen Technologies | Communications |
| LVS | Las Vegas Sands | Consumer Cyclical |
| MO | Altria Group | Consumer Defensive |
| MPC | Marathon Petroleum | Energy |
| MRK | Merck | Healthcare |
| MRO | Marathon Oil | Energy |
| MS | Morgan Stanley | Financial |
| MSFT | Microsoft | Technology |
| MU | Micron Technology | Technology |
| NCLH | Norwegian Cruise Line | Consumer Cyclical |
| NEE | NextEra Energy | Utilities |
| NLSN | Nielsen Holdings | Industrials |
| NVDA | NVIDIA | Technology |
| ORCL | Oracle | Technology |
| OXY | Occidental Petroleum Corp | Energy |
| PARA | Paramount Global | Communications |
| PFE | Pfizer | Healthcare |
| PHM | PulteGroup | Consumer Cyclical |
| PYPL | PayPal | Financial |
| RF | Regions Financial | Financial |
| SBUX | Starbucks | Consumer Cyclical |
| SLB | Schlumberger | Energy |
| T | AT&T | Communications |
| TWTR | Communications | |
| UAL | United Airlines Holdings | Industrials |
| VMC | Vulcan Materials | Basic Materials |
| VZ | Verizon | Communications |
| WFC | Wells Fargo | Financial |
| WMT | Walmart | Consumer Defensive |
| XOM | Exxon Mobil | Energy |
Members of S&P 500 with Three Star Liquidity
| Symbol | Company | Sector |
| ABBV | AbbVie | Healthcare |
| ABT | Abbott Laboratories | Healthcare |
| AEP | American Electric Power | Utilities |
| AES | The AES Corp | Utilities |
| AFL | Aflac | Financial |
| AIG | American International Group | Financial |
| ALK | Alaska Air | Industrials |
| AMAT | Applied Materials | Technology |
| AMGN | Amgen | Healthcare |
| AMT | American Tower | Real Estate |
| APA | APA Corp | Energy |
| ATVI | Activision | Communications |
| AXP | American Express | Financial |
| BBWI | Bath & Body Works | Consumer Cyclical |
| BBY | Best Buy | Consumer Cyclical |
| BEN | Franklin Resources | Financial |
| BKR | Baker Hughes Company | Energy |
| BLL | Ball Corp | Consumer Cyclical |
| BSX | Boston Scientific | Healthcare |
| BWA | BorgWarner | Consumer Cyclical |
| CAG | Conagra Brands | Consumer Defensive |
| CAH | Cardinal Health | Healthcare |
| CARR | Carrier Global | Industrials |
| CAT | Caterpillar | Industrials |
| CEG | Constellation Energy | Utilities |
| CERN | Cerner Corp | Healthcare |
| CFG | Citizens Financial | Financial |
| CHRW | C.H. Robinson Worldwide | Industrials |
| CMA | Comerica | Financial |
| CNP | CenterPoint Energy | Energy |
| COP | ConocoPhillips | Energy |
| COST | Costco | Consumer Defensive |
| CPB | Campbell Soup | Consumer Defensive |
| CRM | Salesforce | Technology |
| CSX | CSX Corp | Industrials |
| CTSH | Cognizant Technology | Technology |
| CTVA | Corteva | Basic Materials |
| CTXS | Citrix | Technology |
| CVS | CVS Health | Healthcare |
| D | Dominion Energy | Energy |
| DHI | D.R. Horton | Consumer Cyclical |
| DISH | DISH network | Communications |
| DRI | Darden Restaurants | Consumer Cyclical |
| DUK | Duke Realty Corp | Real Estate |
| DVN | Devon Energy | Energy |
| EBAY | eBay | Consumer Cyclical |
| ED | Consolidated Edison | Utilities |
| EXC | Exelon | Utilities |
| FANG | Diamondback Energy | Energy |
| FAST | Fastenal Company | Industrials |
| FDX | Fedex | Industrials |
| FE | FirstEnergy | Energy |
| FIS | Fidelity | Financial |
| FISV | Fiserv | Technology |
| FITB | Fifth Third Bancorp | Financial |
| GE | General Electric | Industrials |
| GLW | Corning Incorporated | Technology |
| HAL | Halliburton | Energy |
| HAS | Hasbro | Consumer Cyclical |
| HD | Home Depot | Consumer Cyclical |
| HLT | Hilton Worldwide | Consumer Cyclical |
| HOLX | Hologic | Healthcare |
| HON | Honeywell | Industrials |
| HPQ | HP Inc | Technology |
| HST | Host Hotels | Real Estate |
| HWM | Howmet Aerospace | Industrials |
| IBM | International Business Machines | Technology |
| ICE | Intercontinental Exchange | Financial |
| IP | International Paper | Consumer Cyclical |
| IRM | Iron Mountain | Real Estate |
| IVZ | Invesco | Financial |
| K | Kellogg Company | Consumer Defensive |
| KEY | KeyCorp | Financial |
| KHC | Kraft Heinz | Consumer Defensive |
| KIM | Kimco Realty | Real Estate |
| KMX | CarMax | Consumer Cyclical |
| KR | Kroger | Consumer Defensive |
| LIN | Linde | Basic Materials |
| LMT | Lockheed Martin | Industrials |
| LNC | Lincoln National | Financial |
| LOW | Lowe’s | Consumer Cyclical |
| LUV | Southwest Airlines | Industrials |
| LW | Lamb Weston Holding | Consumer Defensive |
| LYB | LyondellBasell | Basic Materials |
| LYV | Live Nation | Communications |
| MAS | Masco | Industrials |
| MCD | McDonalds | Consumer Cyclical |
| MDLZ | Mondelez | Consumer Defensive |
| MDT | Medtronic | Healthcare |
| MET | MetLife | Financial |
| MGM | MGM Resorts | Consumer Cyclical |
| MKC | McCormick | Consumer Defensive |
| MMM | 3M Company | Industrials |
| MOS | Mosaic Company | Basic Materials |
| MRNA | Moderna | Healthcare |
| NEM | Newmont | Basic Materials |
| NFLX | Netflix | Communications |
| NKE | Nike | Consumer Cyclical |
| NLOK | NortonLifeLock | Technology |
| NRG | NRG Energy | Energy |
| NWL | Newell Brands | Consumer Defensive |
| O | Realty Income Corp | Real Estate |
| OGN | Organon | Healthcare |
| PEAK | Healthpeak | Real Estate |
| PENN | Penn National Gaming | Consumer Cyclical |
| PEP | PepsiCo | Consumer Defensive |
| PG | Procter & Gamble | Consumer Defensive |
| PGR | Progressive | Financial |
| PM | Philip Morris | Consumer Defensive |
| PPL | PPL Corp | Utilities |
| PRU | Prudential | Financial |
| PVH | PVH Corp | Consumer Cyclical |
| PWR | Quanta Services | Industrials |
| QCOM | QualComm | Technology |
| RCL | Royal Caribbean Cruises | Consumer Cyclical |
| ROL | Rollins | Consumer Cyclical |
| RTX | Raytheon Technology | Industrials |
| SCHW | Charles Schwab | Financial |
| SPG | Simon Property Group | Real Estate |
| SWK | Stanley Black & Decker | Industrials |
| SYY | Sysco Corp | Consumer Defensive |
| TAP | Molson Coors Beverage | Consumer Defensive |
| TFC | Truist Financial | Financial |
| TGT | Target Corp | Consumer Defensive |
| TJX | TJX Companies | Consumer Cyclical |
| TPR | Tapestry | Consumer Cyclical |
| TSLA | Tesla | Consumer Cyclical |
| TSN | Tyson Foods | Consumer Defensive |
| TXN | Texas Instruments | Technology |
| UA | Under Armour | Consumer Cyclical |
| UAA | Under Armour | Consumer Cyclical |
| UNP | Union Pacific Crop | Industrials |
| UPS | United Parcel Services | Industrials |
| USB | U.S. Bancorp | Financial |
| V | Visa | Financial |
| VNO | Vornado Realty | Real Estate |
| VTR | Ventas | Real Estate |
| VTRS | Viatris | Healthcare |
| WBA | Walgreens | Healthcare |
| WDC | Western Digital | Technology |
| WMB | The Williams Companies | Energy |
| WRK | WestRock Company | Consumer Cyclical |
| WY | Weyerhaeuser Company | Real Estate |
| WYNN | Wynn Resorts | Consumer Cyclical |
| XEL | Xcel Energy | Utilities |
Where are AMZN and GOOGL
Surprisingly, TastyWorks listed Amazon (AMZN) and Google (GOOGL) as having only two-star liquidity. I’m not sure what metric they used to calculate liquity. Perhaps AMZN and GOOGL are such high-priced stocks which makes their bid-ask spread a bit wide.
At the time of this writing, GOOGL is trading at $2300 and AMZN is at $3300 per share. This is before Amazon’s 20-to-1 stock split.
As far as I’m concerned, Amazon and Google are liquid enough to trade options on them. Just try to negotiate the trade a bit. Put in an order with a good price in your favor. Wait a few minutes, and if not filled, then start moving the price patiently until filled.
Note that the liquidity and composition of the stocks in the S&P 500 can change with time. So this list should not be taken as fixed in stone.
Trade safe!
Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.
