Option Alpha Review
Ease of Use
Option Alpha is a trading platform designed to help users build and test automated trading bots. This platform includes a variety of tools and features, including the ability to create options trading bots, access to a bot wizard, community-contributed bots, custom automations, a strategy backtester, and more. Learn everything you need to know about this trading platform by reading our complete Option Alpha review.
- Easily create automated options trading bots using a wide range of inputs
- Clone and modify bots created by other Option Alpha users
- Backtest options strategies up to three years
- Daily credit spread trade ideas updated every minute
- Free for Tradier account holders (minimum $2,000 account size)
- Strategy backtester doesn’t include optimization features
- Limited number of brokerage integrations
Option Alpha is a trading platform that helps you build and test automated options trading bots. With Option Alpha, you can create a new bot in seconds or copy a successful bot from other users. You can also backtest strategies before setting bots loose and keep tight control over how your bots handle risk.
This software can be a powerful tool for options traders who want to put their strategies on autopilot. Keep reading our Option Alpha review to find out if it’s right for you.
Option Alpha Pricing Options
Option Alpha offers three pricing plans: Standard, Pro, and Pro+.
The Standard plan costs $79 per month or $828 per year. It includes 10 bots limited to $25,000 in monthly trading volume each, plus 100 backtests per month.
The Pro plan costs $99 per month or $948 per year. You get 20 bots with up to $50,000 in monthly trading volume and 250 backtests per month.
The Pro+ plan costs $199 per month or $1,908 per year. It offers 50 bots with up to $100,000 in monthly trading volume and 500 backtests per month.
If you have a Tradier brokerage account with at least $2,000, you can get an Option Alpha Pro+ subscription for free. This promotion runs until at least the end of 2023.
Option Alpha also offers a 30-day free trial.
Option Alpha Features
Options Trading Bots
The key thing you get from Option Alpha is the ability to create options trading bots. You can paper trade with your bots or link them to a Tradier, Tradestation, or TD Ameritrade account to automate your options trading.
To create a bot, you have several options. You can use the bot wizard, copy and modify a bot from the Option Alpha community, or create a bot from scratch.
The bot wizard offers a quick way to create options trading bots that trade weekly, monthly, quarterly, or sequentially (one position open at a time) using a set amount of capital and targeting a specific stock or ETF. You can define the target size for each position as a dollar amount or a number of contracts. You can also limit what contracts your bot will trade by expiration and strike price, and define entry conditions based on the VIX index and the ticker’s implied volatility.
The range of options available within the bot wizard is impressive. For example, you have flexibility to define strike price in several ways, including as a percentage of the option delta, as a dollar amount or percentage above/ below the underlying ticker price, and as a dollar amount or percentage above/below a multi-leg strategy’s long or short leg.
Option Alpha includes a social media-style feed where users can share bots they’ve created along with a description of what they do and how they’ve performed. The community is relatively active, with a new bot template posted every few days.
You can comment on posts, which offers an opportunity to ask the bot creator a question. You can also like posts and sort bot templates by how many times they have been liked. Option Alpha also lets you sort community-contributed bots based on how many times the bots have been cloned by other users.
Any community-contributed bots you clone are fully customizable using custom automations.
To create an options trading bot from scratch or modify a bot template, you can create custom automations in Option Alpha. The software provides a no-code editor that’s very easy to use.
To create an automation, you can set conditionals around inputs like ticker price, implied volatility, trading volume in the underlying symbol, strike price, and much more. Automations can be used to trigger opening a position, but they can also be used to initiate a scan for trade ideas or simply to alert you to opportunities. You can run automations on a schedule or activate them by clicking on a button within your bot page.
The custom automations are especially good for managing risk in open positions. You can set stop loss conditions or create custom loops that define when to exit a position. Option Alpha also offers a simple toggle that lets you automatically close profitable positions before market close to eliminate overnight risk in your trades.
You can backtest a strategy in Option Alpha to see how it would have performed over the last three years. The backtest results show your profit and loss as well as how much of your capital is at risk in open positions at any given time. A statistics table below the P&L chart offers details on your max drawdown, Sharpe ratio, biggest win and loss, average trade duration, and more.
Option Alpha’s strategy backtester works best with bots created using the bot wizard. It doesn’t yet support fully custom strategies created using automations. You also have to enter your strategy in the backtester – you can’t simply choose a bot you’ve created to backtest its performance. There are also no strategy optimization tools within the backtesting module. Overall, the backtester is quite good, but this is a feature that Option Alpha could expand to make the platform even better.
Credit Spread Trade Ideas
Option Alpha offers daily ideas for credit spread trades. The ideas focus on trades with a high probability of profit and a high reward-to-risk ratio. Ideas are updated every 60 seconds and you can filter them by symbol, days to expiration, probability of profit, and more.
These ideas are terrific for new options traders who want to make money from relatively low-risk credit spread trades. However, the ideas aren’t well-integrated into the rest of Option Alpha’s platform. You can set up a bot to trade a credit spread strategy, but you can’t use the trade ideas list as an input for an automation.
Option Alpha currently offers integrations for Tradier, TradeStation, and TD Ameritrade. The company plans to roll out an integration for Interactive Brokers, but doesn’t yet have an estimated release date for this integration.
Option Alpha Platform Differentiators
There are many platforms that can help you build trading bots, but few of them focus specifically on options trading strategies. That’s where Option Alpha stands out. When creating bots in Option Alpha, you can use the metrics that matter most for options trading – like implied volatility, the VIX index, and strike price relative to delta – to define how your bots work.
The ability to create basic bots quickly by cloning bots from the community is also a huge plus. Many other platforms create marketplaces where you have to pay to clone other users’ bots. While users can choose to keep their bots private, the community on Option Alpha appears more than willing to publicly share profitable bots.
What Type of Trader is Option Alpha Best for?
Option Alpha is best for options traders who want to automate their trades using bots. While you can use bots to issue alerts rather than execute trades, Option Alpha is overkill if you prefer to trade manually. Options scanners like Optionsonar or OptionSamurai are much cheaper alternatives to generate trade alerts.
With that in mind, Option Alpha makes the most sense if you use one of its compatible brokers. Tradier customers have every reason to give Option Alpha a try since you can get a Pro+ membership for free.
Option Alpha’s bot creation tools are user-friendly enough that beginner option traders could start building their own bots. However, trading options is risky, and automated options trading is even riskier if you don’t manage risk well. For this reason, we think Option Alpha is best-suited for experienced option traders who fully understand how to manage trading risk.