Trade Simulator and Analysis

In any Options position, its important to use a trade simulator and get a good feel for how your trade will perform over a period of time. There are 3 parameters to simulate your trade –

– Price movement (Delta and Gamma)

– Changes in Implied Volatility (Vega)

Time Decay (Theta)

This video shows how a Bear Call spread on the S&P 500 ETF (SPY) would perform with changes in Price, Implied Volatility and Time decay. The December series has about 36 days to expiry. Using the built-in trade simulator on the Thinkorswim platform, we can see what happens to the trade changing all 3 parameters. Trade simulation and analysis gives insights about adjustment points and profitable exit points. We have a full course on Trade simulation and analysis here – https://optiontiger.com/course/options-analysis-and-simulation/

(Video best viewed on Full Screen)

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8 thoughts on “Trade Simulator and Analysis

  1. My team and I run options portfolios involving a systematic, technical analysis-based formula/algorrithm to pick entry points to buy straddles. We are highly profitable (to put it mildly). We are possibly looking to expand onour own in either a hedge fund or LLC format. Do you have any suggestions?

    1. Sounds interesting Sam. I’m not sure what suggestions in what area you’re looking for. Maybe we can chat sometime ?? Best , Hari Swaminathan

  2. Carlos, TOS has many tutorials on their site. Have you checked that ? Whenever I use a feature, I’ve explained that feature implementation well in all the courses.

    1. I don’t trade on the Tradeking platform but I’ve seen their demos. They are good, I personally prefer Thinkorswim. You can open practice accounts on both of them and see which one you like better

  3. i think this depends a lot on the platform you use. some are obviously better than others. Regardless, sometimes the simulators don’t work perfectly especially when there is high volatility or an uncertain event when option prices are bid up

    1. Mike especially during earnings the volatilities go crazy and i’ve seen that Calendar spreads are particularly difficult to model. Other than these extraordinary times, the simulators work very well especially on TOS.

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