How to Backtest a Strategy (Including Options)

Step 1: Open the Backtest Lab

Go to yrobot.us/backtest. You need to be logged in; the full options features need Pro.

Step 2: Pick a strategy

Choose a preset (stocks) or an options strategy. Read what it purchases and when before you run it.

Step 3: Set the period and ticker, then run it

Pick a lookback period (for example 1 year, 2 years or max) and a ticker.

Step 4: Read the results

Look at the number of trades, the share of winning trades, the return and the time in market. Few trades means weak evidence.

Step 5: Compare with the benchmark

Compare with the benchmark over the same period, and account for time in market: a strategy that sat in cash most of the time took less risk. Averages shown across stocks are unweighted.

Step 6: Stress-test it

Change the period and run it again. If the results flip, the strategy is fragile.

What this can't tell you

Future results. Backtests fit the past, ignore some costs, and options backtests are sensitive to their assumptions.

ŷRobot is an analysis tool, not financial advice. Estimates can be wrong and past patterns may not repeat.