Best Options Backtesting Platforms in 2024

Introduction

Amidst the ever-evolving landscape of financial markets, options trading has emerged as a sophisticated yet highly lucrative strategy for investors and traders alike. As the complexity of trading options continues to grow, so does the demand for reliable tools to analyze and backtest strategies effectively.

While some traders rely solely on intuition or technical analysis, many recognize the indispensable role of backtesting platforms in refining and validating their options trading strategies. Whether you’re a seasoned professional or a novice exploring the world of options, having access to a robust backtesting platform can make all the difference in achieving consistent success.

However, navigating the sea of available options backtesting platforms can be daunting. With the proliferation of new platforms, finding the right fit for your specific needs can feel like searching for a needle in a haystack.

That’s why, in this article, I aim to alleviate the burden of choosing the right platform by presenting a curated selection of the finest options backtesting platforms available in 2024.

Without further ado, let’s dive right into the list!

1. ORATS

ORATS, or Option Research & Technology Services, is a financial technology company that specializes in options data and analytics. Their backtesting platform, Options Backtester, offers a comprehensive suite of features for options traders and tops this list for a multitude of reasons.

The platform boasts over 65 million pre-scanned backtests, providing traders with a vast repository of historical data to analyze and learn from. Additionally, traders have the flexibility to customize and create their own backtests, tailoring strategies to their specific preferences and objectives.

With institutional-quality historical end-of-day options data dating back to 2007 for over 5,000 symbols, the platform offers a robust foundation for conducting thorough backtesting analysis. Traders can access detailed options data spanning a wide range of securities, enabling them to evaluate strategies across various market conditions and asset classes.

Each backtest generated on the platform comes complete with a graph of returns, allowing traders to visualize the performance of their strategies over time. Additionally, the platform provides 37 different performance metrics, enabling traders to assess strategy effectiveness from multiple angles. A table of monthly returns and a detailed trade log further enhance the analytical capabilities of the platform.

To guard against overfitting, the platform features a “find similar” button, which helps traders identify and mitigate the risks associated with overly optimized strategies.

One notable feature of the platform is its seamless integration with option scans, allowing traders to swiftly transition from backtesting to implementing trades in live market conditions. This streamlined process enables traders to efficiently translate backtesting insights into actionable trading strategies.

Coming to the platform’s pricing, ORATS offers a $29 trial of its backtesting software, allowing traders to explore its features and capabilities before committing to a subscription. Alternatively, traders can trial the platform for free by passing an ORATS knowledge quiz, providing an accessible entry point for those looking to leverage its powerful analytical tools.

In summary, ORATS’ backtesting platform is a top choice for both beginners starting their options trading journey and professionals seeking to refine and elevate their strategies. With its vast data library, customizable options, and robust analytical tools, ORATS empowers traders at all levels to optimize their trading approach with confidence and precision.

2. Option Alpha

Option Alpha offers a backtesting platform designed to assist traders in evaluating options trading strategies. One of its primary strengths lies in its user-friendly interface and extensive educational resources. Novice traders can benefit from the platform’s straightforward approach to backtesting, with a variety of tools and tutorials available to help them get started.

Let’s talk about some of the pros of Option Alpha’s Backtester:

• Firstly, is its user-friendly interface. Option Alpha’s platform is known for its intuitive design, making it accessible to traders of all experience levels. The platform’s clean layout and easy-to-navigate menus streamline the backtesting process, allowing traders to focus on refining their strategies.

• Secondly, Option Alpha provides a wealth of educational content, including articles, videos, and podcasts, to help traders understand options trading concepts and develop effective strategies. This emphasis on education sets Option Alpha apart as a valuable resource for traders seeking to improve their skills.

• Speaking of the platform’s customization abilities, traders can customize and test a wide range of options trading strategies using Option Alpha’s platform. The ability to adjust parameters such as strike prices, expiration dates, and position sizes enables traders to tailor strategies to their specific goals and risk tolerance.

Now let’s come to some of the cons of the platform. There are two considerable drawbacks.

• To start with, compared to some other backtesting platforms, Option Alpha may offer a more limited dataset for historical options data. Traders may find that the available data doesn’t cover as long of a time period or include as many securities as they would prefer.

• While Option Alpha’s platform is suitable for traders at all levels, more advanced traders may find that it lacks some of the advanced features and customization options offered by other backtesting platforms.

Overall, Option Alpha’s backtesting platform is a valuable resource for options traders seeking a user-friendly interface and comprehensive educational support. While it may have some limitations in terms of historical data and advanced features, its emphasis on education and accessibility makes it a strong contender for traders looking to refine their strategies and improve their trading performance.

3. eDeltaPro

eDeltaPro’s backtesting platform is a comprehensive tool designed to assist options traders in evaluating and optimizing their trading strategies. Positioned as the third platform on the list, eDeltaPro offers a unique set of features and functionalities tailored to meet the needs of traders seeking advanced analytics and customization options.

Pros:

• eDeltaPro’s platform stands out for its advanced analytics and customization capabilities. Traders have access to a wide range of sophisticated tools and metrics to analyze options trading strategies in-depth. The platform’s emphasis on delta hedging and risk management sets it apart, making it particularly suitable for traders focused on managing options exposure effectively.

• Another notable strength of eDeltaPro’s platform is its extensive historical data coverage. Traders can access a comprehensive dataset spanning multiple years, enabling them to backtest strategies across various market conditions and historical scenarios. This rich historical data allows for more robust analysis and validation of trading strategies.

• Additionally, eDeltaPro offers a high degree of customization, allowing traders to fine-tune strategies to their specific objectives and risk preferences. Advanced features such as scenario analysis and portfolio optimization further enhance the platform’s capabilities, empowering traders to make more informed decisions and optimize their trading performance.

Drawback:

One potential drawback of eDeltaPro’s platform is its learning curve. Due to its advanced features and analytics tools, new users may require some time to familiarize themselves with the platform’s functionalities fully. Traders who are less experienced or seeking a more straightforward interface may find the learning curve challenging.

In conclusion, eDeltaPro’s backtesting platform offers advanced analytics, extensive historical data coverage, and customization options tailored to meet the needs of sophisticated options traders. While it may have a learning curve and higher cost compared to some alternatives, its robust feature set makes it a compelling choice for traders seeking in-depth analysis and optimization of options trading strategies.

4. TastyLive Lookback

TastyLive’s Lookback platform offers a compelling suite of features tailored to options traders seeking a cost-effective and efficient backtesting solution. Positioned as the fourth platform on the list, Lookback distinguishes itself with its accessibility and automation.

Pros:

• Firstly, the pros of the platform. One of Lookback’s standout advantages is its free-to-use model, making it an attractive option for traders operating on a budget. This accessibility democratizes access to backtesting tools, allowing traders of all levels to experiment with different strategies without financial barriers.

• Moreover, Lookback boasts automatic backtesting capabilities across a wide range of tickers, streamlining the process of analyzing trading strategies. Traders can easily conduct backtests on multiple securities simultaneously, saving time and effort in strategy evaluation.

• Another notable feature of Lookback is its ability to export data to CSV format. This functionality enhances flexibility and interoperability, enabling traders to integrate backtesting results with external analysis tools or share findings with colleagues and peers.

Cons:

• Speaking of cons, one potential drawback of Lookback is its limited customization options compared to some other platforms. While the platform offers a variety of pre-built backtests and templates, traders may find fewer opportunities for fine-tuning and optimizing strategies to their specific preferences and objectives.

• Additionally, while Lookback offers automated backtesting, traders should be aware that the platform’s data may not include 1-minute historical data. This limitation could impact the accuracy and granularity of backtest results, particularly for traders employing high-frequency trading strategies or requiring minute-level precision.

To summarize, TastyLive’s Lookback platform presents a compelling option for options traders seeking a free and efficient backtesting solution. While it may have limitations in terms of customization and data granularity, its accessibility and automation make it a great platform for traders to elevate their strategies.

5. OptionStrat

OptionStrat emerges as the fifth platform on the list, offering a comprehensive suite of features tailored to options traders seeking flexibility and customization options. Despite its positioning somewhat in the latter part of the list, OptionStrat presents a compelling solution for traders looking to refine their strategies and optimize their trading performance.

Advantages:

• One of OptionStrat’s key strengths lies in its extensive library of built-in options strategies. With over 50 pre-configured strategies available, traders have a wide range of templates to choose from, enabling them to explore different trading approaches and tactics.

• Moreover, OptionStrat allows traders to create custom strategies by adding their own trades, providing unparalleled flexibility and adaptability. This feature empowers traders to tailor strategies to their specific preferences and market conditions, enhancing the platform’s utility for traders with unique trading styles and objectives.

• Another advantage of OptionStrat is its flexible and easy-to-use visualization tools. Traders can easily analyze and interpret options data using intuitive charting tools and visualizations, enabling them to make informed trading decisions with confidence.

• Additionally, OptionStrat offers a volume indicator for call and put contracts, providing valuable insights into options market sentiment and activity. This feature enhances traders’ ability to identify trends and potential trading opportunities, improving their overall trading performance.

Disadvantages:

• Traders should be aware that real-time options order flow data can be expensive, potentially posing a barrier to entry for some users. While OptionStrat offers a customizable options order flow screener, accessing real-time data may incur additional costs for traders operating on a limited budget.

• Furthermore, OptionStrat’s historical price charts are only available as line charts, limiting the granularity and detail of historical data analysis. Traders seeking more advanced charting options or visualizations may find this limitation restrictive.

In summary, OptionStrat presents a robust set of features and functionalities tailored to options traders seeking flexibility and customization options. While it may have limitations in terms of real-time data costs and historical charting options, its extensive library of strategies and intuitive visualization tools make it a valuable tool for traders.

6. Option Omega

Option Omega, the sixth platform on our list, offers a unique blend of features tailored to options traders seeking comprehensive backtesting capabilities. Positioned as a viable option for traders looking for real-time data accuracy and extensive customization options, Option Omega stands out in certain key areas.

Upsides:

• With 1-minute historical data that closely mirrors real-time conditions, Option Omega provides traders with the granularity needed to conduct detailed analysis and fine-tune their strategies. This feature sets it apart from many other platforms, offering traders a high level of precision in their backtesting endeavors.

• Moreover, Option Omega’s ability to run 10+ year backtests in just minutes is particularly impressive. This efficiency enables traders to analyze strategies over extended periods, gaining insights into performance across various market conditions quickly and effectively.

• Additionally, the platform boasts highly customizable parameters, allowing traders to tailor their backtests to specific preferences and trading styles. This flexibility empowers traders to explore a wide range of strategies and optimize their approach to suit their individual needs.

Downsides:

Option Omega does have some limitations to consider.

• Unlike some other platforms, it does not support manual backtesting, which may be a drawback for traders who prefer a more hands-on approach to strategy evaluation.

• Additionally, the platform is limited to only 5 tickers, which could restrict the scope of analysis for traders looking to explore a broader range of securities.

In summary, while Option Omega may be the last platform on our list, its unique features make it a noteworthy option for traders seeking accuracy, efficiency, and customization in their backtesting endeavors.

Conclusion

The landscape of options trading backtesting platforms offers a diverse array of tools and features to cater to traders’ needs, preferences, and budgets. From ORATS’ robust historical data and Option Alpha’s comprehensive education to TastyLive’s user-friendly interface and Option Omega’s real-time data accuracy, each platform brings its own strengths and limitations to the table.

While ORATS leads the pack with its extensive features and resources, the rest of the platforms also offer unique features and functionalities tailored to specific trader preferences. Whether prioritizing affordability, customization, or real-time data accuracy, traders can find a platform that aligns with their objectives and trading styles.

Ultimately, the key lies in understanding one’s trading goals, evaluating the features offered by each platform, and selecting the one that best suits individual needs. With the right backtesting platform at their disposal, options traders can refine their strategies, optimize their performance, and navigate the markets with confidence.

With that being said, you’ve reached the end of the article. Hope you learned something new and useful from this article. Also, if you know other options backtesting platforms better than the ones listed in this article, don’t forget to mention those in the comments. Thank you very much for your time.