3 New Features in tastytrade Backtest
3 New Features in tastytrade Backtest
It now calculates premium, underlying price offset and percentage out-of-the-money
Some serious improvements have been made to tastytrade's backtesting. We now have the ability to test, not just delta, but also:
- Percentage out-of-the-money
- Underlying Price Offset
- Premium
So, for example, say you want to trade an iron condor with wings that five points wide and where the short strikes are based on 30 deltas ... you can now do that! Or say you want to test the results of buying $1.00 calls in market downturns — you can do that as well.
What has call skew Right Now?
Tom Preston discussed call skew in Tesla (TSLA) stock in today's Cherry Bomb newsletter. We looked into this a bit further and found the average call in the stock is trading 15% over the equidistant put.
We decided to explore what else is trading with call skew in the month of August.
TSLA calls are trading 18% more expensive than puts.
IBIT (bitcoin) calls are trading 13% more expensive than puts.
USO (Crude) calls are trading 24% more expensive than puts.
Gold (GLD) calls are trading 23% more expensive than puts.
Aptos Crypto (APT/USD) volatility = opportunity?
Aptos Crypto (APT/USD) — With 20+ new tokens now tradable on the tastytrade platform, Aptos is grabbing attention. Born from Meta's abandoned Diem project with daily price swings of ±4.57%, spiking up to 13.5% and crashing 16% (nearly 2x bitcoin's volatility). Currently trading at $4.34 (up 9% today), APT/USD ranks No. 33 by market cap with $169 million in daily volume. The network hit 22 million active wallets in December. Aptos offers the kind of price action that makes traders excited. Whether you're bullish on the tech or just chasing volatility, APT/USD swings provide plenty of price opportunities.
Sign up here.
Foreign Exchange Trade Idea
Because tastytrade now has foreign exchange, we have a trade idea for you in FX.
The Swiss franc has strengthened recently, benefiting from the belief that it is a "defensive" currency amid elevated risks and a weaker US dollar. As a result, USD/CHF has returned to levels not seen in 10 years, trading below 0.8100, which is a threshold that it has closed under only three times in the past 10 years.
For traders expecting an easing of tensions and a rebound in the US dollar, going long USD/CHF offers an unusually low entry point, along with the advantage of positive carry. On the other hand, if you anticipate continued dollar weakness and a sharp move lower in US interest rates, a short position in USD/CHF could capitalize on a potential break below the 0.8000 mark.
Two Trades
NIKE ($60.71) short put (AUG) $1.44 credit
Nike (NKE) has been one of the stocks hit hardest hit since President Donald Trump began instituting tariffs. It’s down almost 40% from the 52-week highs and currently just 10% from lows. If you think the worst is over, selling the 55 put in August nets around $1.44 on only $600 in buying power with a breakeven near lows.
Micron ($126.08) cal CRAB trade (JUL/JUN27) $1.37 debit
Micron (MU) has completely "V" bottomed from the tariff lows, which is almost a double from the lows in April. Earnings will be released after market close on tomorrow, and if you think the upside is capped here, a CRAB trade plays into the inside/up move. Buying the July 130 call and selling 2x the 135 for a small debit of $1.37 has minimal risk to the downside — with a kicker if the stock opens inside/up the expected move.
Our newsletter even counts as "research" when your boss walks by. Forward this email to your friends so they can subscribe to our newsletters, too! Get weekly data-driven trade ideas with Cherry Picks and daily pre-market insights and trade ideas with Cherry Bomb.
Michael Rechenthin, Ph.D., (aka “Dr. Data”), managing director of research and development, has 25 years of trading and markets experience. He’s known best for his weekly Cherry Picks newsletter. On Thursdays, he appears on Trades from the Research Team LIVE.
Nick Battista, tastylive director of market intelligence, has a decade of trading experience. He appears Monday-Friday on Options Trading Concepts Live. On Wednesdays, he co-hosts Johnny Trades. @tradernickybat
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