Option Omega Review in 2024

Option Omega is automated options backtesting software that can produce backtests dating back to 2013 in minutes. The software also uses one-minute data, which is crucial, especially when dealing with 0 and 1-DTE options backtests.

Continue reading to learn more about Option Omega, and why it is my favorite options backtesting software.

Why Option Omega is my Favorite Options Backtesting Software

Option Omega stands out in the options backtesting world because it combines automated backtesting with 1-minute historical data. Prior to this software, you’d have to manually backtest with software like OptionNet Explorer for this level of accuracy. 

The ability to run hundreds of 10+ year backtests in minutes is amazing and allows retail traders to build conviction in their options trading. There are tons of ways to modify the test to suit your style, and it is easy to spend hours on Option Omega tweaking your backtests. 

How to Backtest on Options Omega Walkthrough

Once you sign in, you will see tests and portfolios at the top left. 

To begin your first backtest:

1- Click tests

2- Click the new backtest button

3- Begin setting your parameters

4- Be careful not to click off to avoid disrupting your parameters

Setting up Test Parameters

The parameters are incredibly customizable, and I highly recommend you test multi-leg strategies like iron condors and put credit spreads one leg at a time, then combine them in a portfolio. This isn’t necessary, but it can be more efficient and customizable. 

You can customize the following in your backtest:

1- Start date: 1/1/2013 is the earliest start.

2- End date: Test as recent as the previous trading day.

3- Ticker: SPX, SPY, QQQ, IWM, TSLA

4- Strategy (optional): Choose a preloaded strategy like iron condor or iron fly

5- Add leg: Customize the entry parameters for each leg, including:

• Sell or Buy
• Put or Call
• Quantity
• Delta
• DTE

SPX/SPY 1DTE Backtest Example

In our example, we will test a 1-DTE short-put strategy on the SPX and SPY. To account for the weekend when the market is closed, we will have to run a separate 3DTE test for Friday’s “1-DTE” trades.  

So, in Option Omega, I simply select the start date as 1/1/2013 and the end date of yesterday. Next, I choose SPX, then add a leg. The leg will be:

• Sell
• Put
• 1 QTY
• 15 Delta
• 1 DTE (Separate 3DTE Friday only test)
• Daily frequency 15 minutes before close (Weekly, then click for Friday 3DTE)
• -600% stop loss

• Early exit at one minute before close

• 1 max contract per trade
• Ignore margin requirements

I will check “use exact DTE” to ensure it only does the 1DTE trades. For starting funds, I usually go with a high number, like $10,000,000, for the most flexibility. 

I will use 1 contract per day to remain consistent, and later in Google Sheets, we will be able to adjust the number of contracts sold based on account size. You can do this by exporting the backtest data from Option Omega. You can view my Google Sheet for this SPY/SPX 1DTE backtest and make a copy if you’d like to use the template for your own Option Omega exports. 

You can customize the commissions and fees to your own broker, plus you can control the leverage based on notional value. For example, selling one SPY 400 strike put is $40,000 of notional value. Changing the leverage to the spreadsheet to 1 will sell 1 contract for every $40,000 of net liquidity. You can also change the account net liq size. 

My sheet will calculate the following for you based on your Option Omega export results:

• PCR (premium capture rate): Total profit / Total premium sold
• Win rate %
• Total return
• CAGR: Compound annual growth rate
• Max drawdown
• Mar ratio
• Sharpe ratio
• Max % stop loss hit
• Max one contract loss
• Max daily % drawdown

Combining the Tests in Portfolios

Since I ran two backtests in this case (1 & 3DTE for Friday entries), to combine them into a single test, we can use the portfolios feature. Simply click portfolios at the top left, and then click New Portfolio.

You will be able to customize the starting funds and the start and end dates for the portfolio test. Next, I will check the two backtests I want to combine, then click run. 

This will combine the 1 and 3DTE tests together in a single test. Next, you can click “Trade Log” and then use the export to CSV option if you want to analyze the data in Google Sheets. The Benefit of using Google Sheets is you can easily change commissions and leverage based on net liquidity, which you can do in my Google Sheets template. 

Option Omega Free Trial

New users can use my affiliate link to get an Option Omega free trial. It allows you to test out how the platforms works, but you can only backtest QQQ options during the year 2017. Even with the limitations, you will definitely be able to tell if the platform is right for you. You will be able to use all of the backtesting specifications to ensure it can properly backtest your strategies.

Option Omega Pricing

Option Omega costs $99 per month or $599 per year. You can also get 50% off by using my discounted affiliate link using the button below.

Alternatives to Option Omega

Option Omega Review – My Final Take

Option Omega is an excellent resource for options traders looking to build conviction in their strategies. Option Omega is definitely worth a shot if you want automated backtesting software with accurate 1-minute historical data. If you’re not 100% sold on it yet, I would recommend starting a free trial so you can test it out for yourself.

Consider reading my article about using my Option Omega discount code.