Continue reading »]]> Sometime we need to test the history of option trading profitability.  Thanks to thinkorswim thinkBack function that give us this cool features.

Steps to do this is quite simple.

1. Go to Analyze tab and click on thinkBack item below the tab.

2. Enter the stock code. In this example, we’re using AAPL (Apple Inc) and press enter to see the option price.

3. Choose the date we want to test the trade.

Simply click on the calendar icon next to the date. Lets say 22nd June 2011.

4. Now, we should be able to see the list of option availability.  We want to test a longer period, lets say 3 months from this date.  Click on the OCT 11 (121) 100 to see the quoted price.

Right mouse click on ITM call, select BUY and Single.

5. Next choose the date to close the trade. In this example, we choose 26th July 2011.

6. The moment we’ve picked the date, we can immediately see the result.

Wow! We’ve just made a profit of more than $58K within a month.The graph at the bottom shows the option price movement and a profit/loss line.

It’s so easy to test our own strategy using this thinkBack in thinkorswim platform.