Beginner selection scorecard¶
You already have a watchlist. The next system is not “go shop for new tickers.” It is: score every name on that list twice, then shortlist.
Not financial advice
Scores are operating filters, not forecasts. Delta is a heuristic, not a true probability. Confirm the live options chain and filings yourself.
Two scores per name¶
| Score | Question | Used for |
|---|---|---|
| StockFit (0–3) | Would I own this with long-term money? | Shortlist the own-for-years envelope (target 5–8 names) |
| OptionsFit (0–3) | Is this a sane name to practice options on? | Shortlist the options envelope (can differ from StockFit) |
A name can be high OptionsFit and low StockFit (example: a very liquid U.S. stock you do not want as a huge share holding). That is expected.
Spreading the own-for-years money¶
Once names pass StockFit, dollars are not equal-weight by default. A simple core–satellite pattern [operator preference]:
| Piece | Share of the own-for-years envelope | Idea |
|---|---|---|
| Core | about 40–60% | One Canadian-listed equity ETF — either a global all-in-one or a single index (for example S&P 500 in CAD). Smaller core if satellites are companies outside that index |
| Satellites | the rest | A few companies you actually follow that are not already inside the core |
| One company cap | about 15% of that envelope | Stops a single stock from becoming the whole portfolio |
Do not hold two ETFs that do the same job (two all-in-ones, or an all-in-one plus the S&P 500). If the core is the S&P 500, extra AAPL/GOOGL-type shares usually increase concentration, not balance. Satellites that spread a US-index core are typically non-US companies (Canada, Europe, Asia), not more S&P 500 names.
Dollar examples stay in the operator’s private log, not on this public page. A scrubbed ticker table is on Example scored watchlist.
Hard fail (score 0 on both) if: crypto product, you cannot explain it, or the broker will not let you trade it.
Which options “probability” method to start with¶
Start with: defined-risk size + delta-as-POP. [operator preference] aligned with common retail teaching.
| Idea | Plain meaning | When it applies |
|---|---|---|
| Max loss first | Worst case of the structure must be ≤ 2% of equity; heat ≤ 12% | Every options trade, including long calls |
| Delta ≈ rough chance the option finishes in the money | A 0.20 delta short put is often taught as “about 20% chance it expires in the money” — rough, not a promise [verified] as a common heuristic |
Mostly when you sell premium (ladder step 3: credit spreads) |
| Credit / width | On a credit spread, credit ÷ strike-width is a crude “how much you get paid per dollar of max loss” | Same step 3 |
Do not start with: Kelly (needs a real edge you do not have yet), or a full contract grader (scores every strike). Those wait until you have a live chain feed.
Name columns (D20 locked): a QVM-lite rank (quality + value + momentum, 0–9) orders the own-for-years shortlist inside StockFit ≥ 2. An LIV column (liquidity + IV rank + earnings/events) orders option names. IV rank needs a 52-week IV history — leave it blank until the broker or ops can fill it; MVP uses the liquidity leg. Piotroski F-score is a company-only overlay (not ETFs). Greenblatt’s Magic Formula ranks a large universe, not a 12-name friends list.
Ladder reminder: you are still on long calls/puts first. For longs, OptionsFit is mostly liquidity + size + earnings, not selling 16-delta premium. The delta-as-POP rules become the main trade filter when you reach credit spreads. The name filter (this page) is useful from day one.
StockFit (0–3)¶
| Points | Meaning |
|---|---|
| 3 | I can explain it; it is a broad ETF or a durable business I would hold without options; it will not eat the whole $24k by itself |
| 2 | I can explain it; quality is OK, but it is a concentrated/theme bet (e.g. one mega-cap tech) |
| 1 | Speculative or cyclical; only a small slice, if any |
| 0 | Crypto, story-only, or I do not understand it |
Canadian-listed ETFs still score well if they are on the watchlist. If they are not on the list yet, add them then score — do not pause scoring of names you already have.
OptionsFit (0–3)¶
| Points | Meaning |
|---|---|
| 3 | U.S. listed; tight, busy options chain (you can enter and exit) |
| 2 | Options exist and are usable; a bit wider or jumpy |
| 1 | Chain exists but is a poor beginner market (wide quotes, thin) |
| 0 | No usable chain at your broker, or crypto |
Before a live options order, still check: earnings blackout (short premium), and max loss vs 2%/12%. Those are trade checks, not name scores.
How this becomes automation¶
Same columns, same names:
- Done: score the current watchlist by hand (private table).
- Done (ops): store StockFit / OptionsFit, QVM-lite, LIV liquidity, gates.
- Suggest-only MVP: propose high OptionsFit + LIV liquidity (and underfunded D19 stock names); human records skip / approve / reject / defer.
- Later: refresh scores; fill IV-rank on LIV; still HITL. No Magic Formula or contract grader until the data exists.
The dynamic watchlist is re-scoring and suggesting, not scraping the internet onto the list.
Related¶
Not financial advice. Verify broker and CRA rules yourself.