Trading options without a backtested strategy is essentially gambling. It is also impossible to trade with conviction when you haven’t seen how the strategy performs in all types of market conditions.
Backtesting options trading strategies used to take hours of manual work and analysis, but with the best options backtesting software, you can accelerate the process immensely. Continue reading to learn about my favorite options backtesting software and why I like them.
The Best Options Backtesting Software
- Option Omega: Best automated options backtesting platform
- OptionNet Explorer (ONE): Best for manual options backtesting
- tastylive Lookback: Best free options backtesting software
- Option Alpha: Best for trading bots
Option Omega
Option Omega is my top pick as the best options backtesting software because it allows you to perform automated backtests dating back to 1/1/2013 in just minutes. It also uses 1-minute data, which is crucial to ensure you are getting accurate results, especially for 0 and 1-DTE strategies.
Option Omega also allows you to set highly customizable parameters. This includes entry based on VIX levels, deltas, DTEs, and much more.
An awesome feature of Option Omega is the portfolio feature. It lets you split multi-leg strategies up to see how each piece works individually. For example, you can test put credit spreads as a short put and a long put, allowing you to find the most optimal entry points for each leg.
Notable Features of Option Omega
- Backtest SPY, SPX, QQQ, IWM, and TSLA options
- Utilizes 1-minute data, ensuring accuracy even for 0 and 1-DTE options
- Ability to export backtest results to a CSV for further analysis
- Portfolio features allows you to combine multiple strategies into one portfolio
- Backtest starting from 2013 to yesterday, allowing you to continually monitor a strategies performance over time
Pricing
7-day Free Trial: Limited access to 2017 QQQ data
Monthly Subscription: $99 per month
Annual Subscription: $599 billed annually
Click here to get 50% off Option Omega using our discounted affiliate link
Option Omega costs $99 per month or $599 per year. You can save 50% off your first year when you sign up with our discounted affiliate link, which means it will only cost $49 per month or $300 for an entire year. We may be compensated if you purchase a subscription with this link.
OptionNet Explorer (ONE)
OptionNET Explorer (ONE) is a powerful tool for traders who engage in complex multi-leg strategies that often require multiple adjustments. For strategies like the space trip trade (STT) and other intricate setups, ONE offers the advanced tracking capabilities that you need.
Platforms like thinkorswim generally allow you to track trade adjustments, but after a few, the risk diagram doesn’t account for them. This is where ONE excels, as you can track multiple trade adjustments without your risk diagram forgetting about past trades.
Notable Features of ONE
- Access to 5-minute historical data
- Integration with thinkorswim, IBKR, and Tradier to oversee live positions
- Free real-time data through your broker’s live data feed
- Ability to place orders directly with your broker
Pros and Cons of OptionNET Explorer (ONE)
Pros:
- Connects with various brokers
- Offers 5-minute historical data for manual backtesting
Cons:
- Lacks automated backtesting features
- No monthly pricing option
OptionNET Explorer Pricing
ONE costs about $660 per year, depending on the payment frequency you choose. This makes it about twice the price of Option Omega. However, you can also save 10% on your ONE subscription when you use my affiliate link to sign up.
- 10-day trial: 10 GBP (approximately $12)
- 3-month subscription: 160 GBP (approximately $200)
- Annual subscription: 525 GBP (approximately $660)
tastylive’s Backtesting
tastylive’s Lookback is an excellent starting point for those interested in backtesting options at no cost. It covers all major tickers and offers a hands-on experience with automated backtesting tools. However, for more advanced settings and precise data, Option Omega may be a better fit.
Notable Features of tastylive Lookback:
- Free access, making it easy for anyone to start backtesting
- Backtest individual trades
- Set basic parameters for automated backtesting
- Forward testing capabilities
- Test multiple tickers with data going back to January 1, 2013
- Export results as a CSV file
Pros and Cons of tastylive Lookback
Pros:
- Free to use
- Offers automatic backtesting across multiple tickers
- Ability to export data to CSV
Cons:
- Fewer customizable parameters compared to Option Omega
- Data may not include 1-minute historical intervals
Option Alpha Backtester
Option Alpha offers a comprehensive backtesting platform that stands out with its user-friendly interface and robust educational resources, making it accessible for traders of all experience levels. You can test out the platform for free, but the paid plans offer the ability to use trade bots and run more backtests each month.
Notable Features of Option Alpha
- Quickly update and tweak your backtests in seconds.
- Discover new strategies through community performance rankings.
- Fully functional without needing to write any code.
- Access extensive data going back to 2007 for most tickers.
Pros:
- The platform is easy to navigate, making it suitable for both beginners and experienced traders.
- Offers a wealth of content, including articles, videos, and podcasts, to help users improve their trading skills.
- Allows for testing a wide variety of strategies with adjustable parameters like strike prices and position sizes.
Cons:
- Compared to some other platforms, the available historical data may be less extensive, which could be a limitation for traders who require a broader dataset.
- While suitable for most traders, more advanced users might find that it lacks some of the deep customization and features found in other backtesting tools.
Option Alpha Pricing
Option Alpha options backtesting software costs from $69-$199 per month, depending on your plan and payment frequency. If you use Tradier or Tradestation, you can get Option Alpha for free if you connect your brokerage account.
Which Options Backtesting Software is Best For You?
Overall, I believe Option Omega is the best options backtesting software since it offers 1-minute historical data and allows you to perform automated tests in minutes. The only downside is it only works with a handful of tickers.
tastylive offers an excellent free backtesting software if you want automated backtesting without paying. While the parameters you can set are not as good as Option Omega, it is a great free alternative to mess around with.
OptionNet Explorer (ONE) is best for those with trade advanced multi-leg strategies that require adjustments. It is also the best option if you want to manually backtest your strategy.