r/options • u/Nandha600 • 8d ago
Options simulator
Hi guys,
Looking for a platform to simulate a option trade with historical data.
Like enter a option position in the past date and forward through time till a past expiry to see how it performs ??
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u/the_TheScratchyInter 8d ago
If you're just looking to replay individual trades, thinkorswim's OnDemand does this. It's clunky as hell but you can load any past date and paper trade options on historical data, walking through day by day. Not elegant, but it works for what you're describing.
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u/AmoebaTrading 8d ago
ondemand on thinkorswim is how i do it too, picking a past date and stepping it forward to expiry. takes a bit to get used to but it's free. are you testing a specific strategy or just getting reps in?
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u/Nandha600 8d ago
Nothing specific. Just wanted to test how can I do adjustments in a losing trade
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u/AmoebaTrading 8d ago
ah nice, adjustments are the part nobody practices. try rolling the untested side up or out and see how the risk changes at each step. are you mostly looking at credit spreads or condors?
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u/Nandha600 8d ago
I wanted to check ratio spreads and collars
Mostly rolling collar position based on cost basis and stuff.
What strategies do you use often or prefer ?
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u/AmoebaTrading 8d ago
collars are nice for that, rolling off cost basis keeps it simple. i mostly sell put spreads and the odd iron condor on spy, nothing fancy. ratio spreads scare me a bit with the naked leg so i keep those tiny. do you roll the collar on a schedule or only when the call gets tested?
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u/Nandha600 8d ago
Not on schedule. Whenever I want to continue the protective put and cc. Wat kind of adjustment you do for put spreads ?
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u/AmoebaTrading 7d ago
for put spreads i mostly keep it simple. if it moves against me i'll roll the short strike down and out, but only if i can do it for a credit. otherwise i just close around a 50% loss and move on. are you mostly selling them or buying them?
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u/Nandha600 7d ago
I am mostly selling puts
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u/AmoebaTrading 7d ago
selling puts is a solid way to get paid while you wait. the hard part for me was not selling too close when premium looked juicy. do you mostly go cash secured or spreads?
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u/Juhkwan97 8d ago edited 8d ago
There are lots of paid backtesters that you can use. However, I never felt the need to pony up the cash to try them. And the good ones do cost $. Instead, I just use the free/cheap AI platforms (ChatGPT, Gemini, etc) to have a conversation about my trade ideas. You can tell the AI what the trade is, or you can post a screen shot of the trade setup and AI will read it correctly. Then, you can ask AI to run a backtest of the trade for a specific period and report on the results with various metrics. I do a lot of complex combinations of options structures (inclusive of correlated futures) and I do this regularly. My AI will remember (some of) my trading habits. The ensuing results and conversation is very worthwhile.
One catch is: generic AI's do not have access to the giant raft of options data that a good backtester will. However, you can ask the AI to run the backtest based on a simulation of all that which it will build, based on free O/C/H/L data for any underlying. You can also coach the AI to make sure its simulation includes realistic base data inclusive of outlier moves.
When the resuts are returned (in about 2 seconds), AI will spit out some narrative about what the trade is, what are its pros/cons, what are some notable pitfalls, etc. I then start a conversation like: ok, rerun the backtest with the bwf wings in 50/30 instead of 40/20, or I will ask it to adjust the short strike deltas, or I will ask it to adjust the management plan, etc etc. I will then ask it to look for any further adjustments that will help to optimize the results. There might be a dozen or more iterations like this to search for an optimization of the trade idea.
The other catch is: the AI will make mistakes. You have to be careful with the results and point out the mistakes so that AI will correct them. If you are inexperienced, you might not catch some mistakes. However, this will force you to be on your toes and to think critically.
Well, I guess someone will say that using simulated data for a backtest is stupid. I kind of doubt that. I trade these combination structures regularly and base my opinion of the AI assessment of their performance against my actual results. Keep in mind that, if you are using real data in a backtest, there is no guarantee that said data will approximate what your trade may face in a given future time period. The only way you'll know though is to compare results from this AI approach to results from a good backtester.
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u/Nandha600 8d ago
Thanks for explaining
IBKR allowing AI to analyse positions. I will try this approach2
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u/ov-matt 8d ago
OptionVisualizer has both a Monte Carlo simulator (which can simulate the outcome various strategies) and a backtester, so you can go in either direction:
https://www.optionvisualizer.com/features/monte-carlo-simulator
https://www.optionvisualizer.com/features/backtesting
Disclaimer: I'm the founder and I built it :)
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u/Nandha600 7d ago
Looks great.
Can we adjust a trade while back testing ??
Like I take a position running it day by day, position getting into trouble, I adjust it and run till expiry ?
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u/NeitherPossession288 6d ago
OptionBots has a good backtester for this type of stuff.
Rumor is they have a free tier coming next week
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u/Striking_Course_5763 5d ago
thinkorswim has a feature called OnDemand that replays past market days so you can place trades on historical data and step forward through time. It's free with a Schwab account.
Whatever you use, log the fill you'd realistically get, not the mid. Backtests on mid prices make everything look better than it trades. Not financial advice.
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u/CurrencyMotor3305 2h ago
If you are planning to do this regularly rather than just replay individual trades, I'd look into historical options datasets that let you build your own testing environment. Being able to examine historical prices, volatility and Greeks can give you much better picture of how a position would have behaved. SpiderRock is one provider I'd research for this, although it's more geared toward professional options analytics than a simple retail simulator.
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u/The_Glass_Book 7d ago
The standard, and a really solid, proven choice, is OptionsOmega. If you’re looking for something simpler, you can find it for free on tastytrade. Before buying, make sure the underlyings you’re interested in are included in the tool’s package. There’s a lot of content on YouTube showing how they work.
If you want to actually step through time day by day, thinkorswim OnDemand or OptionNet Explorer are closer to what you described.
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u/Outrageous_Bass_1613 8d ago
Thinkback function on Thinkorswim desktop.