Does WealthLab Pro support options trading?

You should ask Fidelity whether they support options trading. As for backtesting option strategies, here are resources that you may find useful:

* Wealth-Lab Wiki FAQ > Does Wealth-Lab 6 have options support?
* Any way to pull up Options data for backtesting?

If I cannot "trade" options using real non-synthetic options at Fidelity, and the only thing I can do here is backtest, then where?

How would I try it out on a live options account with another broker, if that's what is required?

Brokers other than Fidelity are not supported in Wealth-Lab Pro.

The idea is to use Wealth-Lab Pro to test option trading strategies. You can apply the code to give you Alerts when to buy and sell options, but you have to enter those trades manually with other Fidelity tools, such as AT Pro or fidelity.com.

If you decide to go about it this way, it would be a good idea to modify the code for synthetic options to use the live contract symbols/data.

It's been about 18 months since the last post on this topic. I want to know if anything has changed regarding the ability to trade options in WLP. Here are my specific questions:

1. What's the reason WLP is unable to trade an valid (active) option symbol in a live account from a trade ticket? I suspect one of the reasons is that the trade ticket currently does not have all the required trade type choices that an ATP option trade ticket does, such as Buy to Open, Buy to Close, Sell to Open, Sell to Close. Is that the cause of the problem or is it more involved than that?
2. Can options be “traded” in a Paper Account, even if not in a live one? If not, why not?
3. Are option bid and ask prices available to the strategy? (They are displayed in WLP trade ticket.) If not, then can the strategy code fetch them in real time from Fidelity quote or another source (Google, Yahoo, MSN, et. al.)?
4. With intraday trading, if WLP is unable to trade on a bar+1 because there are no transactions on that bar, can you feed the program a price and force it to complete the trade?
5. For trades of an External Symbol (such as an active option), does WLP provide Performance and Trades data for the External Symbol trades on the Performance and Trade tabs of the Strategy Window?

1. (Retracted)

2. I haven't tried paper trading the synthetic options but I doubt it would have worked since their data isn't physically available i.e. there isn't such thing as "synthetic options DataSet". Neither there's possibility to use their streaming quotes in the Accounts tool. At least this may apply to non-Fidelity data providers.

3. No, they're not available. Furthermore, since bid/ask prices are not related to options specifically please use forum search for insights. This subject has been discussed before extensively. Reusing those threads is much appreciated in this context.

4. How this relates to option trading which is the subject of this thread? I'm very confused. Please also clarify why mock prices are required for bar+1 in principle?

5. Question does not make sense to me. WLP provides the backtesting performance for your strategy, not "active option" (synthetic option, stock symbol, futures contract or whatever).

1. Simply put, the requirement to trade options live with WL Pro wasn't identified early on. At this point, it's not really a consideration.

2. It might be possible. To have a chance, you would need to make sure to select the Fidelity Provider in Preferences > Streaming and use a correctly-formatted symbol. It should be easy for you to test.

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5. To me it makes sense. Yes, of course. If the Strategy trades External symbols, those trades are certainly included in the Trades view and Performance report and everywhere else, although you need to run an extra routine to visualize external trades in a chart.

fwiw, a Strategy doesn't need to trade the primary symbol, but in most cases it wouldn't make sense to program a strategy that way... although in the case of options, it's clear that the underlying stock may be preferred as the primary symbol even though the strategy is creating trades for [external] option symbols.

Re: 5. It's pretty obvious from running a single backtest that WLP does include the performance results of synthetic options in the visualizers. So the purpose of asking this question in such a roundabout way confuses me.

@Eugene

QUOTE:
2. I haven't tried paper trading the synthetic options but I doubt it would have worked since their data isn't physically available i.e. there isn't such thing as "synthetic options DataSet". Neither there's possibility to use their streaming quotes in the Accounts tool. At least this may apply to non-Fidelity data providers.

I am not referring to synthetic options here, I am referring to real, live, actual options. Think using Paper Account to trade real, live, stocks, to test strategies with real data without risking capital. I am wanting to know if I can do the same thing with options in a paper account. I understand that currently trading options with real money is not available with WLP. I am asking if that constraint also exists for Paper Accounts, and if so, why.

QUOTE:
3. Furthermore, since bid/ask prices are not related to options specifically please use forum search for insights.

I know you said you are not an expert on options, so let me help out here. B-A prices are *completely* relevant to option trading, particularly when the B-A prices are wide. B-A prices are critical to option trading because you rarely would buy at market and for certain options you need them to set a limit price.

QUOTE:
4. How this relates to option trading which is the subject of this thread? I'm very confused. Please also clarify why mock prices are required for bar+1 in principle?

Sorry you're confused. I suspect the problem is that these questions are relevant, but out of context. Yesterday you asked me to move these questions away from the content where they were posted. See https://www.wealth-lab.com/Forum/Posts/How-to-code-quot-nearest-term-ATM-call-option-quot-38518 #64. I carefully constructed this overview of what I want to do, so all these seemingly unrelated questions would have a context and not be confusing. I think it might be helpful to you if you re-read the Objective and Background and Requirements in that post. In a nutshell, I am anticipating some of the hurdles to implementing my goal, and poking at some workarounds.

As I previously described in the referenced post above, many options are thinly traded and are unlikely to have a trade on a WLP bar, therefore no price. It's my understanding that unless there is a workaround for this, the trade will not be taken, even with backtesting. However, in the real world, the trade would take place with the right limit price.

QUOTE:
5. Question does not make sense to me. WLP provides the backtesting performance for your strategy, not "active option" (synthetic option, stock symbol, futures contract or whatever).

Here's where I see there is a disconnect in understanding. Let me lay out the logical thought process:
1. I want to test strategies that buy / sell an external option symbol based on an underlying index signal
2. Option strategies can't be reliably back tested in WLP, for reasons that largely have nothing to do with WLP
3. However, WLP *could* theoretically forward-test option strategies but it seems there are some missing pieces (like a non-compliant trade ticket)
4. In this application I would use WLP not for backtesting, but forward-testing, attempting to simulate a Paper Account (unless I could do it in a Paper Account, thus my previous question).
5. I would plan to automate the live, real money trading, or minimally set up trade tickets, running WLP on streaming data in a Strategy Window.
As I understand, WLP can do all these things, just not for options. I am trying to work with you to find a way to do it with options. I hope that helps.

In the interest of using everyone's valuable time most meaningfully, I believe it would be most productive to start a dialog on https://www.wealth-lab.com/Forum/Posts/How-to-code-quot-nearest-term-ATM-call-option-quot-38518 #64, rather than try to address the multiple issues it raises out of the context of what I am trying to do. I hope we can move to that.

@Cone

QUOTE:
1. Simply put, the requirement to trade options live with WL Pro wasn't identified early on. At this point, it's not really a consideration.

I can gather it wasn't an initial consideration, but the world has changed and option trading is more popular than 10 years ago. I assume that WLP added synthetic options (with some fanfare I might add) a couple of years ago, because someone thought it was important to do more with options in WLP (which I completely agree with). From what I can see, the implementation thus far is incomplete and not very useful. (You yourself have pointed out the limitations in various posts.) However, I suspect WLP is not technically very far from making that leap. Based on what I understand of the WLP capabilities that currently exist, a quantum leap in option support might not be a stretch.

Is it not a consideration because you don't see demand or Fidelity is not interested?

QUOTE:
2. It might be possible. To have a chance, you would need to make sure to select the Fidelity Provider in Preferences > Streaming and use a correctly-formatted symbol. It should be easy for you to test.

Interesting. I did try it using a trade ticket and a paper account. The results were surprising to me.

In the paper account, it executed a order at market. It also executed an order at a limit above the ask price.

I couldn't help myself. I placed a market order in a live account using the trade ticket. It filled (completed)! I couldn't see the position in ATP and I didn't think it actually executed. I called Fidelity and was told that there was not transaction, and no record of a pending transaction.

Apparently, the live trade was not completed because the trade ticket is not yet compliant with trading options. However, WLP doesn't know that, and assumes the trade completed, when (I'm assuming) the limit price was hit.

The implications of this are quite profound. If one could programmatically set option limit prices at fair market value (approx. at the midpoint of the bid and ask), you could do real forward-testing with options as an external symbol. Am I missing something here?

QUOTE:
fwiw, a Strategy doesn't need to trade the primary symbol, but in most cases it wouldn't make sense to program a strategy that way... although in the case of options, it's clear that the underlying stock may be preferred as the primary symbol even though the strategy is creating trades for [external] option symbols.

Right. I can't imagine basing a strategy on using options as the price signal. However, I can envision using options as a proxy for the primary to provide leverage in a strategy with many small-profit trades.

As I noted with @Eugene above, these questions are in the context of the post you referred me to the other day at https://www.wealth-lab.com/Forum/Posts/How-to-code-quot-nearest-term-ATM-call-option-quot-38518.

Based on the work you did there, and my finding in this post, I would like your thoughts about whether this work can be extended to actually trade the option symbol externally.

The biggest practical issues I see currently is access to the Bid-Ask price to appropriately set the limit price. (It's ironic that it appears on the trade ticket but cannot be accessed programatically. As an alternative, can the bid-ask be made available to the strategy with a fetch on the symbol from Google or another real-time quotes provider?

QUOTE:
B-A prices are *completely* relevant to option trading,

I am not arguing. It's just a statement of fact that B-A prices are not available to Strategy code and do not fit into the non event-driven model of Wealth-Lab Strategy execution. Consequently, any discussion re: getting access to this data (if made available by a 3rd party resource) would get purely technical and therefore fit an existing thread on B/A data rather than this general options Q&A thread. Hope this makes sense.

QUOTE:
Based on what I understand of the WLP capabilities that currently exist, a quantum leap in option support might not be a stretch.
Is it not a consideration because you don't see demand or Fidelity is not interested?

If by chance you haven't noticed this thread: Fidelity may discontinue Wealth-Lab Pro, then let me quote the most related post which should answer your question. I couldn't have said it any better:

<<He informed me that while Fidelity had made a decision a couple of years ago to no longer add significant new features or updates, they have no plans to discontinue it. They will continue to fix bugs and maintain the platform for foreseeable future.>>

QUOTE:
If by chance you haven't noticed this thread: Fidelity may discontinue Wealth-Lab Pro, then let me quote the most related post which should answer your question.

I have read that thread. It obviously didn't dissuade me. Should it? You are quoting one of more than 30 opinions and suppositions on this topic. I'm curious why you picked this one. Is it because it is the "best" comment in your opinion based on your closer understanding of Fidelity's intentions and goals for WLP?

I would not base a conclusion this important on what someone found out from a "rep". You have to go much higher in an organization to know you are getting correct information. I will pursue that path because I don't want to be wasting Cone's and your time discussing potential new ideas that will never be implemented.

I am still not sure whether my immediate goals can be met with *current* WLP capabilities used in a creative (perhaps novel) way that I would never figure out by myself. I will pursue the experiments that you and Cone have suggested. I will try to keep my questions bounded by what I am finding as I do this.

I continue to work on getting better at figuring out where to post.