I trade options for my trend trading with equities, as they help me limit my risk while amplifying my profits at the same time. I know some might trade options intraday, which can be profitable as well. I use technical analysis to guess where things are going using 1440 minute bars and I tend to then do then look at the greeks and formulate the strategy I want to follow based on what I see.
I wanted to know what other follow options traders might be using... thus far I have used, but not really settled on any given one, the following tools.. which I have purchased or have access to or have an interest on..
I would like to opinions of others as to the available tools and what other tools you have found of interest and of use to aid on the option analysis... I am mainly using TOS tools right now, since they are the fastest and I can "backtest" strategies with it as well.
The following 5 users say Thank You to sysot1t for this post:
An Excel sheet, connected to TWS Interactive Brokers using DDE for real-time analysis.
I've tried some of the software described above, Visual Options Analyzer is a good tools, but I'm happy with my sheet, because I know how it's built, the figures displayed are not coming from nowhere, and I know I can trust them.
I'm not backtesting options strategies, and I found that very hard to do, mainly because of the liquidity of some of them, and bid/ask spread (because of to the low liquidity).
If, in your backtest, you always use the "worst" price, the strategy will never make money. If you use the best price, you have large probabilities to win more than you should have won in real. Using (bid+ask)/2 is a solution, but I don't like it, as sometime you will be executed, sometime no...
Backtesting options strategies is very hard, and the results that can give you some websites or some software seems to always show you the best case, and this is not happening, most of the time...
Usually in trading, those who know don't talk, and those who talk don't know. (Al Brooks)
success requires no deodorant! (Sun Tzu)
The following 2 users say Thank You to sam028 for this post:
I am not that sophisticated enough to write up my own xls with dde for feeds to do options.. I used to long time have xls for tracking positions mainly, nothing more.. those had DDE for market data.. but I understand what you mean, nothing better than knowing what goes into the tools your money depends on....
As an example... I dont personally use matlab for anything, though I know lots of people that live and die by it for their trading analysis and execution directly with IB.. I am nowhere near their level of expertise... about only thing I did for one of them was design a solution so he was able to perform analysis on his basket in under 1 min using a ML370G6 with 2xGTX470s which also became his file server and overall analysis "workstation" ..... I would say that those using MatLab have a really good understanding of how options works and the best ways to profit from it.. more than likely..
I have been personally using TOS Thinkback for "backtesting" my strategies based on signals that I would have traded.. the link below can give you some more details... my trades last until they reach profit target or I see "signs" of it loosing steam... sometimes I like to know what would have happened if I failed to take a trade for which I had a signal, and I use TOS for that piece as I dont always have the time to execute the trade in demo account.
if you do decent volume.. 100+ contracts per month... you can negotiate your costs... and still get the $35/month rebate ... they had no issues lowering my fees at all... but I liked IB for being able to to FX via a ECN.. so I moved the IRA over there instead... FX trades with TOS are with FXCM..
I will take a look at it... the piece that I am personally looking for is something to allow me to track the portfolio or positions, show me net gains from current position (along with metrics to manage the trade) and triger alerts when a given $$$ target is hit... in a very simple way...