Commutation failures (CFs) are usually triggered by the voltage dips caused by the faults in the receiving-end systems. To reduce the probability of CFs, counter measures to reduce the voltage dips should be implemented, among which adding dynamic var sources (DVSs) is very helpful. In this paper, an optimal allocation method for DVSs is proposed to maximize the benefit of DVSs to be installed. First, the probability of CFs is quantified based on the concept of area of vulnerability where the detailed ac network is considered. In order to find the most effective locations for installing DVSs, a 0-1 nonlinear programming model is formulated based on the quantitative index. Then, we introduce penalty functions to transform the binary programming to an unconstrained optimization problem, which can be solved by the gradient iteration method efficiently. Moreover, the sensitivity analysis in the calculation of gradient provides a better understanding of the relationships between the DVSs and CFs. In case studies, the 37-bus system and 1648-bus system are used to show the effectiveness of the proposed method.