About this template
V.2 UPDATE
- Based on 210 more backtests, I found the 15 DTE exit along with a 10% profit target was more robust compared to the original version
- Here are the all-time comparisons (A is the V.2 and B is the original bot):
V.1 ORIGINAL BOT
This is a super-simple bot! It opens a 45 DTE call on SPY each week and exits at 25% profit or 20 DTE. The idea is based on Warren Buffet's investing advice:
After numerous backtests here in Option Alpha, I've found that long SPY calls have the optimal blend of high profit, high win rate, low risk, and low drawdown.
------------------- 1 YEAR BACKTEST RESULTS -------------------
------------------- 3 YEAR BACKTEST RESULTS -------------------
------------------- 5 YEAR BACKTEST RESULTS -------------------
------------------- 10 YEAR BACKTEST RESULTS -------------------
------------------- 16.5 (ALL TIME) YEAR BACKTEST RESULTS -------------------
A word of caution: As you can see, in the All Time back test, this is a bullish strategy and using it consistently in a bear market (2008 housing crash) has devastating results. But I'm encouraged how well it performed during the onset of the pandemic and most recently the 2022 bear market. Obviously, please test it in paper first before going live with it. I've made a video explaining my backtests and the simple ideas that started the creation of this bot.
