Where do I start? I could pull out an old book from the shelf, wipe off the dust and then turn to page 127 and copy down a list of options strategies to plagiarize about, but instead of that, I’ll give you some personal tips on designing options strategies.
First Step to Designing Options Strategies
If you truly want to become a successful options trader using your own formulas, then you’ll need to purchase historical options data. There are many sources online, just do a search. You’ll probably want at least 10 years of data.
Step 2 to Designing Options Strategies
This step could be step one, but you’ll need to get yourself a good options education; otherwise, you won’t have any idea of how to write and refine your options trading formulas. I am biased, but I think SJ Options is the best options course money can buy. Just read our testimonials and check out our track record.
Step 3 to Designing Options Strategies
You’ll also need to learn how to program in order to test your algorithms with the historical data you purchased. If you are not a coder, then you can certainly hire someone to code for you. Make sure you work with someone you can trust, just in case you develop yourself a winning options strategy! You’ll want to keep your formula secret when you find it. IP theft is very common, so protect yourself with agreements and Docusign, etc.
Step 4 Testing Out Your Options Strategy
After you develop an options trading system, you’ll want to forward test it through paper trading. This can be done at any broker pretty much. However, broker’s software doesn’t typically track your trading history with adjustments for you; for a complete platform that does this, our options trading software is an excellent choice.
Step 4 Going Live
After you have completed the steps above, then you’ll most likely want to go live. This is your ultimate goal right? Make sure you know how to execute your trading system. Sometimes we make mistakes on our broker’s platform, like putting in trades backwards, etc. So put the time into knowing how your broker’s software works. Also, make sure you know your broker’s policies, especially confirm their margin calculations work properly with your options strategy. Many people do know this, but brokers use their own margin calculations at times, and they tend to be buggy at best.