The Stoptions Algorithm

How the algo scores
every setup, every morning

700+ stocks across S&P 400/500 & Nasdaq 100. Four independent signals. One conviction score. Every qualifying setup gets a full stock or options trade card in your inbox by 9:32 AM ET.

700+ tickers scanned daily
4 independent signals
0–100 conviction score
Stock & options trade cards
Daily Pipeline

From market close to your inbox

The algo runs two steps every trading day — a pre-market scan at 9:00 AM ET and a final options analysis at 9:30 AM ET. Stock and options trade cards hit your inbox by 9:32 AM ET.

1
🔄9:00 AM ET — Step 1

Universe loaded

700+ stocks across S&P 400, S&P 500, and Nasdaq 100 are loaded via Amora Edge with live price, volume, and EMA data.

2
9:00 AM ET — Step 1

Four signals scored

Each stock is scored 0–100 across EMA crossover, RSI zone, Relative Strength vs SPY, and Volume Surge. Takes about 8 seconds per batch.

3
🏆9:00 AM ET — Step 1

Top candidates selected

Only stocks scoring 65+ advance. On a typical day that's 15–40 stocks. On high-breadth days, up to 60. Ranked by composite score.

4
📡9:30 AM ET — Step 2

Options chains fetched

Live options chains pulled from Massive/Polygon API for every qualifying ticker. ATM strikes, IVR, open interest, bid/ask spreads.

5
🛡️9:30 AM ET — Step 2

IVR filter applied

Any setup with IVR ≥ 90 is automatically rejected. Buying options at peak IV destroys edge — the filter is non-negotiable.

6
📬9:32 AM ET — Step 2

Trade cards delivered

Final stock and options trade cards — entry range, target, stop, Greeks, and position sizing — hit your dashboard and inbox. Done before market open.

Layer 1 — Momentum Filter

The four scoring signals

Each signal is independently scored 0–25 points. A stock must hit 65+ total to advance to options analysis. Click any signal to see exactly how points are awarded.

📈
EMA Crossover
Is the trend intact?
25 pts
▼ more

The algo checks whether price is above both the 20-day and 50-day Exponential Moving Averages. EMA crossovers identify sustained directional momentum — not short-term noise.

RSI Zone
Is momentum healthy?
25 pts
▼ more

RSI (Relative Strength Index) measures the speed and magnitude of price changes on a 0–100 scale. The algo targets the "momentum zone" — neither oversold panic nor overbought exhaustion.

🏆
Relative Strength
Is it beating the market?
25 pts
▼ more

RS measures how a stock has performed versus the S&P 500 ETF (SPY) over the past 20 trading days. A positive RS% means the stock is attracting more capital than the broad market.

📊
Volume Surge
Is big money involved?
25 pts
▼ more

The Volume Surge ratio compares today's volume to the 20-day average. High relative volume confirms that institutional participants are actively buying — not just retail noise.

Score Simulator

Drag each signal to see how scores change

Each signal contributes up to 25 points. Minimum 65 to advance.

EMA CrossoverPrice vs 20/50-day EMA trend
18/25
RSI ZoneRSI in momentum zone (45–75)
17/25
Relative StrengthOutperforming SPY over 20 days
20/25
Volume SurgeVolume vs 20-day avg ratio
15/25
70 / 100
✓ Advances to options analysis
70
Layer 2 — Options Analysis

What happens after the 65-point threshold

Layer 2

Options Chain Analysis

Only stocks passing the 65-point threshold reach this stage. Here the algo fetches live options data from the Massive/Polygon API and selects the optimal contract.

📐
Contract Selection

Targets the ATM strike with 25–45 DTE (days to expiration). Near-term expiry = higher gamma. Far-term = theta drag. The 25–45 window maximises directional leverage with manageable decay.

🧮
Greeks Calculation

Delta (directional exposure), Theta (daily decay cost), Vega (IV sensitivity), and Gamma (rate of delta change) are calculated and displayed in every trade card so you know exactly what you're buying.

📊
IV Rank Filter

IVR is calculated against a 252-day rolling window. Any setup with IVR ≥ 90 is automatically rejected — buying options when IV is at its yearly high is a losing strategy regardless of direction.

💰
Position Sizing

Recommended position size is calculated as 1–3% of your account size (set in your dashboard). Sizing adapts to the composite score — higher conviction setups can take a slightly larger allocation.

IV Rank Filter

Only setups with IVR below 90 advance. High IVR means options are expensive — buying overpriced options destroys edge.

05010042IVR

Moderate IV

Low IV (ideal)High IV (rejected)

Why 65 points?

Backtesting across 500+ closed trades showed that setups scoring 65+ produced significantly better win rates than lower-scoring setups. The threshold balances selectivity (not too few picks) with quality (not too many marginal setups). On days with fewer qualifiers, the algo delivers fewer picks — it never forces a trade.

Output

What a trade card looks like

Every qualifying setup produces a full trade card with signal breakdown, options contract details, entry range, target, stop, Greeks, and position sizing.

NVDANVIDIA Corp
CALLScore: 84
Contract
NVDA 910 CALL
28 DTE · Apr 18 exp
Entry
$8.40 – $8.80
Mid of bid/ask
Target
$14.50 (+72%)
Stop
$4.20 (–50%)
Greeks
Delta
0.52
Theta
–$4.20
Vega
18.4
IVR
38
Signal Scores
EMA Crossover
25
RSI Zone
22
Relative Strength
20
Volume Surge
17
Composite score84 / 100
🎯
Entry range

A bid/ask midpoint range rather than a single price — so you can set a limit order and not overpay.

📏
Target and stop

Target is calculated at the next major resistance. Stop is set at 50% of premium — the point where continuing to hold costs more than exiting.

🧮
Greeks explained

Delta tells you how much the option moves per $1 of stock move. Theta tells you how much you pay per day just to hold. These are shown so you can make an informed decision — not just follow blindly.

💰
Position sizing

Calculated as 1–3% of your account size, with the percentage tied to the composite score. An 84-score setup gets a slightly larger allocation than a 67-score setup.

FAQ

Common questions about the algo

Does the algo work in bear markets?

The algo scans for momentum — which is naturally scarcer in bear markets. It delivers fewer picks (or none) when fewer stocks meet the 65-point threshold. That's by design. No manufactured setups.

Can I see why a setup was scored the way it was?

Yes. Every trade card includes a full signal breakdown showing the exact score for EMA, RSI, RS, and Volume. You can audit every pick.

Is this backtested?

The signal weights were calibrated on historical data. The 65-point threshold, IVR cutoff, and position sizing rules were all derived from backtesting across 500+ closed trades.

What if I disagree with a pick?

Every trade card is a signal, not an order. You review the Greeks, the signal scores, and the market context and make your own decision. The algo surfaces the setup — you control the execution.

How often are new picks generated?

Every trading day. The algo fires at 9:00 AM and 9:30 AM ET. On low-momentum days it may deliver 2–3 picks. On strong-breadth days, up to 10.

Will the LSTM model change the signals?

The LSTM layer (activates at 50 closed trades) adds a learned confidence multiplier on top of the existing score — it doesn't replace the four signals. It learns from outcomes to weight which signal combinations have historically produced the best results.

See it in action

The Morning Brief lands in your dashboard and inbox every trading day by 9:30 AM ET — with full trade cards, signal breakdowns, and position sizing.