Backtesting Feature on Tastytrade

Overview

• The backtesting feature is available for Tasty account holders on the web-based platform (my.tastytrade.com).
• The interface allows users to backtest option strategies without any risk.
• Users can see how a strategy would have performed over a specific period and with specific ticker symbols.

Interface and Functionality

• Accessible via the "Backtesting Beta" button on the left panel.
• Requires acceptance of terms and conditions.
• Offers customization of entry and exit parameters.
• Provides over 10 years of options data for backtesting.

Process

1. Select Ticker Symbol
   • Limited selection available, but expanding over time.
2. Choose or Build Strategy
   • Options include pre-built strategies like debit spreads, iron condors, or custom strategies.
   • Example: Short put in SPY with entry adjustments.
3. Adjust Trade Parameters
   • Delta: Change from 30 to 50 for higher risk (at-the-money).
   • DTE: Disable exact day tracking; focus on weekly options.
   • Active Trades: Limit to one contract to avoid multiple open positions.
   • Profit Target: Set to 50% profit for trade closure.

Key Features

• Customization of quantity, delta, and expiration.
• Use of Delta instead of Strike simplifies for past pricing.
• Results include comparison with buy-and-hold strategy for SPY.

Analysis Tools

• Summary Tab: Shows total profit, average profit/loss, max drawdown, and return on capital.
• Details Tab: Offers detailed trade metrics, including trade-by-trade P&L.
• Logs Tab: Provides granular data on trades, orders, and transactions. Allows download for further analysis.

Additional Resources

• A Help Center article is available for guidance.
• Written and video materials will be provided to aid understanding.

Conclusion

• This feature allows Tastytrade users to comprehensively analyze past option strategies.
• Offers a risk-free method to test and refine trading approaches before applying them live.