 Welcome back. In this lesson we're going to review the options back tester. At navigation trading we do not guess on how we think a strategy is going to perform. We use statistics and probabilities to back up every trade that we make. Before you place a trade there are a few things that you need to figure out. One, what's your market assumption? Are you long biased? Are you short biased? Are you neutral on the overall trade? What's your strategy? Are you trading in iron condor, strangle, butterfly, etc. And a lot of that depends on where the implied volatility level is. And then you need to figure out when you're going to enter the trade and when you're going to exit the trade. Let's go to the back tester and take a look at some examples. So here's the option back tester. I've got SPY as the symbol. We're using a strangle, short strangle. So we're selling the strangle and we're entering with 45 days to expiration. And if we get a profit of 50% of max profit we are exiting the trade. So based on that criteria you can see there's five different scenarios up here. One is selling the 50 delta puts and calls. That's essentially a straddle. The at the money puts and calls. And then we get a little bit wider as we go down the line. And so when we, our standard strangle that we trade at navigation trading is typically kind of in that 15 to 30 delta range. So right in right in this area here. And as you can see SPY strangles have been a profitable trade over the last three years. And you've got, if we look at the 20 delta call, this is kind of the most common one we use. 36 wins, 7 losses, over 83% win rate, over 50% return. And so you can see that we're using these statistics and back testing to back up the strategies that we use. What if you wanted to do this on QQQ? So you wanted to trade the NASDAQ. Same thing. You're going to see all the statistics to back up your strategy before you place the trade. You can do this on any symbol. What if we want to take a look at a stock? Let's say Home Depot. They've got earnings announcements coming up. Well, take a look at Home Depot. It's, you know, the return is still a good win rate. You've got 31 wins, 8 losses. But the returns are kind of eh, right? They're not quite there. So, but one of the other things you can do is you can filter and say, okay, I want to trade strangles in Home Depot, but never trade during the earnings announcement. So it would exit the trade before and it would put the trade on immediately after the earnings announcement. And look what that does. Went from a 14% return up to 55% and gave us those stats that we needed to back up the trading strategy. If you're interested in this scanner, in this option back tester, I've provided a link in the resource links. You can click on that and check out more information about it. Hope this was helpful. We'll talk to you in the next lesson.