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If I had to choose one and was forced to just choose one, I would, every day of the week, choose a professional option trader on my left shoulder over software. I, too, am a pro, was a market maker on NYSE ARCA and CBOE. That experience is immensely powerful. Luckily, we don't need to make that choice -- we can have both -- the experience of pro trader and the power of the back-tester. I say this totally aside from being the CEO of Capital Market Laboratories, having a tool like the back-tester with a voice of experience, reason and intelligence like Kim, is, in my opinion, a total no brainer if you really intend to profit consistently from options. And yes, I am a consumer of the back-tester as well. I use it to trade. With respect to execution types -- irrespective of the time of quote, executing at mid-market, market, or half way between mid and market (our default), is critical to understanding a realistic trade analysis. Our time stamps use realistic quotes, not those crazy wide quotes at the end. Thanks for your questions! Really shrewd group here and I am very impressed. You're all very lucky to have each other.

Wednesday (end of day) - Trade downloads in Excel - Trades copy and paste into excel with one click - Intraday pricing for stops Next Monday (end of day) - 4 years of data - Spreads based on dollar denominated amounts (we already use deltas). (backtest a $5 wide spread that is $2 out of the money, as opposed to 40/20 delta spread) Three Mondays from then - Custom strategies (up to 4 legs) - Custom days before and after earnings trading (we have 2 by default now) Actually a lot more coming, but for competitive reasons we will not make it public unless you are a member.

I agree. A tool helps, but the live trades are very valuable.

@thanitpYou can say the same about ONE software and optionslam. But still the demand for SO service is so strong that I need to close it 3-4 times per year (will be closing again in few weeks). For every member who cancels we have 2-3 new subscribers. And most members who cancel come back after few months (or years). I believe that no software can replace live trading and discussions that we have on the forum. Most members still consider it very valuable, but of course it's up to members. The software is supposed to be a supplement to live trades and trade discussions that we have on the forum.

@Kim @Ophir Gottlieb and other contributors, thank you very much for the information. I'm wondering what does it mean "soon". It seems a lot of new useful features are prepared to be released. Could you be more specific and share with us whether we can count it in days or weeks rather than in months or years? Thank you once more and good trading.

We are adding custom trades soon (create your own and save them). We are also adding technical indicators soon. We do have limit orders already in the application.

Just signed up yesterday. I like it so far. It's very focused on simpler mechanical trades at the moment, but it's pretty good at that. I spent a lot of time playing around with the VXX and had some eye openers that I think were well worth the cost. It'll be fantastic when it supports intraday data and limit orders. It'd also be much better if you could build a little logic into the entries, like only if VIX < 20, stuff like that.

Yes, we receive a percent of sales and also get a say into development to make sure the strategies we discuss at Steady Options are covered. As our long time members know, I rarely recommend any product, and if I do, It's only ones that I'm using myself (like ONE and optionslam), regardless of compensation that I get or don't get.

Hi Bam, The $49 / mo is actually the promotional price. The price will go up to $99/mo (likely) once we add stock technical studies, custom strategies etc.. But anyone that signs up now does get all upgrades for the same price.

@Ophir Gottlieb I'm curious, is your research available on Thomson Reuters Eikon ?

@Djtux We use EOD data. But, in a few days we releasing a patch that will use intraday data for stops and limits.

Hi there. We cover equities, ETFs and indices, but not commodities. We are adding a custom strategy with in a few weeks, that will allow you to break out of the pre-created strategies, and create whatever you like, up to 4 legs. This will cover calendars as well as broken wing butterflies and really any other construction. You will be able to create as many as you like and save them, to use/test them again at any time. This will likely sit in a new "advanced mode" so the simplicity of the standard mode will remain, but more advanced usage will be easily accessible. We are also adding the functionality to trade 'x' number of days before earnings and close 'x' number of days after. Right now we have this, but it is set at 2 trading days -- soon the flexibility to choose your own will be available. With respect to back-testing a shortput spread over the last 3-years, I understand your point, but it really isn't the goal of the back-tester. The point is, if you have a belief that the next year (or six-months, or one week, or whatever), will be somewhat similar to the last 6-mos, 1-year, 2-years, 3-years, or whatever you select, then you can pinpoint exactly which deltas, what timing of opening and closing, which length of options and how to handle earnings. Irrespective of market direction, for example, owning a call or a call spread in some names, like Veeva Systems (VEEV) has been a big loser even though the stock is up 100%. However, selling puts, or puts with a stop, or a put spread, has returned 2-3x the stock. What we're seeing here is not some magic future telling crystal ball, what we're seeing here is that the vol dynamics in VEEV support a pretty strong thesis that being a net seller of premium (and vega, gamma and theta) has been substantially better than being a net buyer. For reference here is a link to that story: http://www.cmlviz.com/cmld3b/index.php?number=11369&app=news&cml_article_id=20170328_investing-in-upside-in-veeva-systems-inc-nyse-veev-with-options While we would expect this for a stock that has moved just a little, or even a little rise, this is not the case with most stocks that have this abrupt of a rise (100%+). For most of those stocks, should you have been a net buyer of deltas you would have done much better than the stock and certainly selling the downside preimum. VEEV is just one example of how a mass calculation with a few clicks can uncover vol dynamics for a company that would not have clear otherwise. Further, and more broadly, whether we are in a bull, bear, or sideways market, stock dynamics also tend to repeat. So, for some stocks, selling a put and closing with a 80% limit gain (i.e. sell a $2 put, buy it back if it goes to $0.40) has a massive effect on returns. That's bc some stocks tend to bounce rather wildly around expiration, or even more broadly, within expirations (the 80% limit is just random to this example, you can test any limit you want). Imagine a stock that trades for $100, we're short a 95 strike put @ $2 and option goes to $0.40, 15 days before expiration, with the stock at $98. Some stocks, this is just a hold -- let the options expire worthless.But there are stocks that tend to vacillate wildly and all of a sudden, the stock goes to $94 and the put hits $3. There's no real way to measure this behavior comprehensively without a back-tester unless you really have a lot of data and code up your own HV analysis (which is awesome if you do). Hopefully the purpose of the back-tester is clearer now. As an aside, we will be adding stock technicals as well, so you can trade option strategies with entries and exits based not only on earnings, stops and limits, but also on technical triggers. Thanks! Ophir

Well, I just got too excited and immediately bought it! But, people should be aware that they are getting A LOT more than ONLY the "Trading Machine" program. There is also a wealth of educational material and ideas, that is sort of laid out in a similar way as you do at SO. I thought I was just getting the program, but I was happily surprised to find that it includes so much more. I think I will be glued to my computer for the next 2 days. I just wish they had "Calendars" as one of the choices of strategies.

You are right. But you still have an option to indicate different deltas, compare naked puts to put spreads, set different price target and stop losses etc. Question I got by email: I liked this video. Will I be able to back test our earnings and non-earnings SO strategies? Will this also help back test our new RUT strategy? I remember that you back tested this manually quite recently. Will you be using this software going forward yourself? Answer: Current, no. But Ophir mentioned to me that they are developing an option to do custom strategies where you can do virtually whatever you want - open x days before earnings, close y days before/after earnings, define custom strategies etc. And yes, I will be using the tool.

I agree. It does look very interesting. I am always looking for various types of "screeners/scanners" related to options. My only problem with the presentation video that we were sent, is that all of the hypothetical backtests you performed, had a look back period of 1-3 years and the types of strategies you used (ex. selling puts) are not presenting a fair picture since the market has basically gone straight up, most of the time, except for a handful of exceptions, over the past 5+ years. If you just pick a strategy that involves selling puts , or put verticals, and remove earnings exposure, common sense would tell you that you are probably going to get a positive picture. You need to make a "fair and balanced", showing both sides, in your presentation which would include, for each test, 2 opposites. For example, do the same backtest with selling calls, or call verticals, using all of the same restrictions (ex. no earnings exposure). Or, do the same exact backtest by using an underlying that has zero correlation to the (stock) market ( ex. corn, sugar etc). I would also like to know how extensive you can go with the searches you create. For example, I would love to scan for calendars, where the front expiration is trading at a much higher IV than the back expiration. I know that this almost exclusively occurs during the time frame leading up until earnings but, on rare occasions you do find them during non-earnings periods. This also would give us a great way of backtesting one of our favorite strategies that we do here. We could setup calendars that we would only put on if the front IV is higher than back IV and "exclude earnings" exposure. This way we could actually backtest our own strategy, and see how it performs, on a wide variety of underlyings going back in time. Also, do you include commodities in your data?

Hello all. I'm here to answer any questions you have about the Trade Machine (option back-tester). Have a great weekend! Who is this guy? Ophir Gottlieb (CEO & Co-founder) — Ophir Gottlieb is the CEO & Co-founder of Capital Market Laboratories (CML). He contributes to Yahoo! Finance, CNNMoney, MarketWatch, Business Insider, and Reuters. He was rated the 14th best finance follow on all of Twitter. CML is a member of Thomson First Call. Ophir Gottlieb is inventor of the Forensic Alpha Model (FAM) and a co-inventor of Accounting and Governance Risk Model (AGR), both now owned commercially by MSCI. Mr. Gottlieb’s methodological approach taken in creating FAM was endorsed by the head of artificial intelligence for the state of Germany as a novel and extraordinary application of advanced machine learning and quantitative finance. FAM and AGR are used by asset managers worldwide with over $1 trillion of assets under management. The FAM model has made Mr. Gottlieb one of the most recognized names in all of quantitative finance. Mr Gottlieb’s mathematics, measure theory and machine learning background stems from his graduate work in mathematics and measure theory at Stanford University and his time as an option market maker on the NYSE and CBOE exchange floors. He has been cited by various financial media including Reuters, Bloomberg, Wall St. Journal, Dow Jones Newswire, NY Times, and through re-publications in Barron’s, Forbes, SF Chronicle, Chicago Tribune and Miami Herald and is often seen on financial television.