Once you have entered your strategy, you can click on the “Backtest” button to see the results. You will see a page like this:
On this page, you can see the details of your strategy, such as the net debit or credit, the max profit and loss, the break-even point, and the greeks. You can also see a graph that shows the profit and loss at expiration and on the day for your strategy. You can use the slider above the graph to adjust the date or the price and see how your profit and loss change with time and price. You can also check the boxes at the top to see how your delta and theta change with time and price.
You can also click on the “Advanced” button at the top to see more statistics about your strategy, such as the cumulative percent and the P/L bell curve. The cumulative percent line shows the likelihood of you receiving a certain amount of profit/loss or greater, with the percent being on the y-axis. The P/L bell curve line shows the distribution of profit/loss, with the P/L being on the x-axis. You can use the slider above the graph to adjust the date and see how the probability and the distribution change with time.
Why use lookback?
Lookback is a useful tool for options traders who want to test their trade ideas and see how they would have performed historically and before committing money on the trade. Lookback can help you:
- Evaluate the risk and reward of your options strategies and compare different strategies
- Optimize your options strategies by adjusting the variables such as expiration date, strike price, and delta
- Learn from your past trades and improve your future trades
- Gain confidence and experience in options trading
Conclusion
Tastytrade’s lookback feature is a powerful and free tool that lets you backtest your options strategies and analyze your success rate with historical data and trade simulation. Lookback can help you evaluate, optimize, learn from, and gain confidence in your options trading. If you are interested in options trading and want to test your trade ideas, you should give lookback a try and see how it can improve your trading performance.
