A little backtesting? A little backtesting. Let's do it. Backtesting feature is live for anyone that has a Tasty account on the web-based platform, which is my.tastytrade.com. Along the left side panel, you will see the backtesting button, the little beta, backtesting beta button, and it'll pull up this interface after you accept the terms and conditions.
Yes. Signing away your life. Yes. Just kidding. It's a cool feature where you can backtest.
option strategies without putting up any risk. It's basically a way to see how the strategy would have performed over a specific period of time in a specific ticker symbol. You have entry and exit parameters you can customize as well. So this is the first page you select your ticker symbol. You can say there's a they're built in.
So we don't have you don't have everything now. Hopefully at some point in the future. I don't think it'll be everything, but more selection.
Adding more consistently. But you can you have over 10 years of options data here. You can customize.
And you can do it from this calendar. Yeah. Let's replicate the trade that I did for the written piece, if you don't mind. What do we do?
Well, I don't know your written. We'll go to SPY. Okay. And then just keep the date the same, January 1st, 2023. January 1st, 2023? Yeah, that's the default, at least for this one here.
Why do I have to use your trade? Why can't I do mine? I want to do my trade.
January 1st. Okay. January 1st. So you can select a strategy here.
You can go with... debit spread iron condor whatever but also build your own yeah just so you know but yes go on sorry i can't yeah you can custom you can customize it too i just made it kept it simple and i did a short put in spy so the way you can add other ones just so people know you can add legs like this up to four legs yeah i mean you could change them buy sell you could do any sort of custom funky thing you want to do you know selling a put spread to buy a call spread whatever yeah whatever you want to do yeah yeah so yeah i did a short put in spy I did adjust a couple of things here. So on this interface, you can see your trade entry parameters and your exit parameters. So I changed the delta from 30 to 50. Ooh, right at the money.
Right at the money. Big risk taker. I also disabled the exact DTE.
Okay. Because SPY has weekly options. I don't really care about the exact day.
I just want to get as close as possible and just keep this thing running. Yes. I also limited the next one below it. I limited the number of active trades. So what that will do, and I clicked the second one here, close the old one and open a new one.
So with this, and I changed it to one, one. So this just ensures that the parameters will not go more than one contract at a time. It's open, close, open, close. You won't, you won't have open, open, open, open and have like 10 trades on.
Yes. And then the only other thing I did here was I closed at 50% profit on the bottom, right? Okay. So you can change that to 50% there. Yeah.
So 50 Delta put, closest to 45 days, have only one trade on time, roll at expiration if it's still there and it has not reached the 50% profit. But if it reaches the 50% profit, it will close and open a new one. And open a new one. Exactly. And a couple of things to note.
So you can, of course, change the quantity as well. You can change the Delta and the expiration. Just keep in mind there, you can't. So. For ease and simplification, we're using Delta as opposed to Strike because Strikes are very different, especially when you go back in time when things are lower priced.
You know, if you're doing $5 wide spreads in SPY 10 years ago, that's a way different position than a $5 wide spread now. So when you use Delta, it kind of accounts for some of that difference in relative value. It also makes it so that, you know, you don't miss specific Strikes, right?
So you... not every stock is going to have dollar wide strikes where you can pick exactly this strike. So using Delta, using the 50 Delta is basically just at the money, regardless of whatever the stock price is. Exactly. Good.
And you run it and you get your results. Yeah. Pretty quick.
Yeah. So what's cool about this feature is the orange line is your test. So the orange line is your back test with all your parameters.
You can, you can see at the top there, all the, all the things we entered as well, short put. every 45 days and all the conditions that apply and the gray line on this chart is if you were to just buy and hold spy so you can see but they're not the profits aren't together it's price of spot correct correct yeah so this is like spy is at 567 at the end and you've made eight grand yeah so they're the it's not just buying and holding it's just the price of the underlying mapped with the profit got it so as you can see short put in spy still does very well, especially with these parameters, still does very well, even in a ripping market to the upside. Your biggest drawdown here was likely just now in the August cycle when SPY was aggressively dipping, but you made it back on the way back up.
So yeah, nice feature here. And then that's on the summary tab. So the details tab is another way where you can see some more trade metrics. And actually, if you go back to the summary tab real quick and scroll down a little bit, you can see...
your total profit average profit or loss max drawdown and return on capital that's used so some basic info there but then as nick clicked on the next tab you can see a bunch of other metrics much more detailed trade by trade p l you can see the biggest losers biggest winners and naturally that that big volatility along the right hand side was the august meltdown we had and then the quick recovery a lot more metrics there that you can analyze yep and the last tab the logs this is where you can get really granular if you want you can look at every single line item you can do it by trades orders transactions and you can download this as well So if you are a savant in the... Nerd. If you're a freak in the sheets, you can download... A freak in the Excel sheets? That's good.
That's decent. That is very good. You can download the data and you can analyze it yourself if you want to do something different.
That's funny. Yes. So this is now available if you have a web-based... If you have access to a browser. Yes.
And you have a Tasty account. My.tastetrade.com. Yes.
And again, I will be writing a piece on this if you want written info on it. There's a Help Center article that already exists on the Taste Street Help Center. But I use this trade exactly, so this will be nice.
It'll be nice synergy when you're reading and watching the video that we will surely embed within that article as well.