Optionable Stock

A stock under which you can buy and sell options.

It means that some bank somewhere (or maybe all of 'em) is making a market in options, likely both put and call, on that stock.

So..."everyone" makes a market in options on Disney. Big, fat, liquid, well-known company that "everyone" owns. So something like 25 banks around the world trade options liquidly in DIS. Good for the customer; less good for the banks.

Why? Well, the more competition trading in a commodity, like a stock option on DIS, the narrower the spreads (or profits) to the banks.

So that's an optionable stock.

What's a non-optionable one then? Well, many stocks are just not liquid enough to be worth a bank setting up the infrastructure to deal in them. Lawyers. Technical systems. Committed capital and shares to back up the trades. The hiring of $10-million-a-year traders to run the desk. Lots of costs. Unclear rewards if a stock only trades, say, a few million shares a day. So they don't.