Researching an Options Strategy for Apple (AAPL) with ORATS 

Start with the Stock, Not the Strategy 

Many options traders begin with a market opinion. Perhaps you’re bullish on Apple (AAPL), expect the stock to remain rangebound, or simply want to generate income from the shares you already own. 

The challenge is deciding which options strategy best matches that outlook. 

Should you buy calls? Sell puts? Trade a vertical spread? Write covered calls? 

ORATS can help answer those questions by showing how similar strategies have performed historically under comparable conditions. Rather than starting with a strategy and hoping it works, traders can begin with a stock and investigate which approaches have historically delivered attractive risk-adjusted returns. The ORATS Backtester allows users to search, rank and compare large numbers of historical strategy tests across popular underlyings. [interactiv…rokers.com], [orats.com] 

Step 1: Search for Apple 

From the ORATS Backtester, navigate to the All Backtests page. 

The search and filter tools allow you to narrow results to a specific underlying symbol. Enter: 

Symbol: AAPL 

The results now display historical tests specific to Apple options rather than the broader universe of available symbols. The All Backtests page allows traders to filter by symbol, strategy type and ranking criteria. [interactiv…rokers.com] 

Step 2: Select a Strategy Type 

Apple traders may find dozens or even hundreds of historical strategy variations. 

To simplify the process, begin with a familiar strategy category: 

• Covered Calls 
• Cash-Secured Puts 
• Bull Put Spreads 
• Long Calls 
• Iron Condors 

At this stage, don’t worry about finding the “perfect” trade. 

Instead, focus on understanding how each strategy behaves differently. 

For example: 

Covered Calls 

• Generate premium income 
• May limit upside participation 
• Often appeal to long-term shareholders 

Cash-Secured Puts 

• Generate income while seeking stock ownership 
• Benefit from bullish to neutral outlooks 

Bull Put Spreads 

• Defined-risk strategy 
• Generates credit income 
• Typically requires less capital than cash-secured puts 

Step 3: Rank Results 

One of ORATS’ most useful features is the ability to rank strategies using different performance measures. The system enables traders to sort and compare historical results using various performance metrics. [interactiv…rokers.com], [orats.com] 

Popular ranking criteria may include: 

• Return on Risk 
• Win Rate 
• Annualized Return 
• Sharpe Ratio 
• Maximum Drawdown 

A strategy producing the highest return may not necessarily be the best choice if it also experienced substantial losses along the way. 

This is where ORATS helps traders move beyond headline performance numbers. 

Step 4: Open the Detailed Analysis 

After selecting a backtest, click the row to open the detailed report. 

Several views become available, including: 

• Equity Curve 
• Performance Metrics 
• Monthly Returns 
• Trade Log 

These views allow traders to understand not only what happened but how the results were achieved. [interactiv…rokers.com] 

When viewing the equity curve, ask yourself: 

• Was growth relatively smooth? 
• Were returns concentrated in a few exceptional periods? 
• Did large drawdowns occur? 

Consistency is often as important as profitability. 

Step 5: Compare Multiple Ideas 

Suppose your research identifies three potentially attractive Apple strategies: 

1. Covered Call 
2. Cash-Secured Put 
3. Bull Put Spread 

Rather than selecting one immediately, compare: 

• Historical return 
• Maximum drawdown 
• Win rate 
• Return consistency 

An investor seeking monthly income might favor one strategy, while a trader seeking capital efficiency may prefer another. 

The goal is not to copy historical results but to understand how different strategic choices influenced outcomes. 

What We Learned 

ORATS is most effective when used as a comparison tool. 

Instead of asking, “What should I trade?” 

Ask: 

“Historically, how have different Apple options strategies behaved, and which one best matches my objectives and risk tolerance?” 

That shift in thinking can turn ideas into a more structured research process. 

Try It Yourself 

Using AAPL: 

1. Compare a covered call against a cash-secured put. 
2. Rank each by Return on Risk. 
3. Review the equity curves. 
4. Examine the maximum drawdown figures. 
5. Decide which approach you would feel most comfortable managing in a real portfolio. 

Why Did We Choose 45 Days to Expiration? 

One Filter Can Change Everything 

When new users first encounter ORATS, one setting immediately stands out: 

Days to Expiration (DTE). 

Depending on the strategy, you might find historical tests using: 

• 14 days 
• 30 days 
• 45 days 
• 60 days 
• 90 days 
• 250 days 

A common question is: 

Why would one trader select 45 days while another chooses 250? 

The answer lies in the trade-off between risk, time, and opportunity. 

What Is DTE? 

Days to Expiration simply represents how many days remain before the option contract expires. 

For example: 

• A 30 DTE option expires in approximately one month. 
• A 60 DTE option expires in approximately two months. 
• A 250 DTE option may remain active for nearly a year. 

The selected expiration influences: 

• Premium received 
• Time decay 
• Risk exposure 
• Probability of assignment 
• Trade duration 

As a result, DTE is often one of the most important factors affecting strategy performance. 

Short-Dated Options 

Strategies using shorter expirations frequently experience faster time decay. 

Potential benefits include: 

• More premium collection opportunities throughout the year 
• Faster realization of profits or losses 
• Greater flexibility 

Potential drawbacks include: 

• More frequent trading 
• Higher transaction activity 
• Less time for a market outlook to develop 

Many traders are attracted to short-dated options because results are realized quickly. 

Intermediate Expirations 

Many experienced premium sellers often focus on expirations between approximately 30 and 60 days. 

Why? 

Because these expiration cycles may offer an attractive balance between: 

• Premium income 
• Time decay 
• Risk management 
• Trade frequency 

This explains why you may encounter numerous ORATS strategies using 45 DTE settings. 

It isn’t necessarily the “best” expiration. Instead, it represents a middle ground that many traders use as a starting point for research. 

Long-Dated Options 

Longer-dated options may remain open for months. 

Potential benefits include: 

• More time for a directional thesis to develop 
• Reduced need for frequent adjustments 
• Exposure to longer-term market trends 

Potential drawbacks include: 

• Capital tied up for longer periods 
• Slower time decay 
• Reduced annual opportunity frequency 

Longer expirations are commonly associated with LEAPS-style strategies and longer-term investment themes. 

Using ORATS to Compare DTE 

One powerful ORATS workflow is to hold everything constant except expiration. 

For example: 

Assume you are researching a bull put spread on AAPL. 

Run similar historical searches using: 

• 30 DTE 
• 45 DTE 
• 60 DTE 
• 90 DTE 

Now compare: 

• Return on Risk 
• Drawdowns 
• Win Rate 
• Equity Curve 

The results may reveal meaningful differences despite using the same underlying stock and strategy structure. 

The Key Lesson 

Many traders spend considerable time debating strike selection but overlook expiration choices. 

Yet changing from 30 DTE to 60 DTE may alter the historical performance characteristics of a strategy dramatically. 

ORATS allows traders to test these assumptions with data rather than relying on rules of thumb. 

Try It Yourself 

Using your preferred underlying: 

1. Select a single strategy. 
2. Compare 30, 45, and 60 DTE. 
3. Rank by Return on Risk. 
4. Review maximum drawdown. 
5. Determine which expiration profile best aligns with your objectives. 

Next, we’ll explore another critical decision: choosing strike prices.