What is a Backtest?
A backtest is a interactive tool that simulates an investment strategy and how it may have performed in the past using historical data. It's important to know what assumptions go into these and how they differ from trading on the OPTO app.
Key Points to Understand
Hypothetical Nature: All backtest results are hypothetical and benefit from hindsight. If a backtest comprises stocks that have gone up over the past year, it's performance is not indicative of any possible future returns.
Past Performance: Past performance is not a reliable indicator of future performance.
Estimation: Backtests estimate how a model performs under specific market conditions and are not recommendations for actual trading decisions in the past or the future.
Variability: Results may vary with each use and over time.
Data Sources
Backtests: For backtests on OPTO, we use daily closing prices from Morningstar. These prices are not adjusted for corporate actions. These prices do not represent real quotes from any points during the trading day. When trading on the OPTO platform, real intraday prices are used and will differ from backtest prices.
Universe of Investments: This universe of assets available to back-test includes the stocks and ETFs that OPTO users may trade, which are the fractionable stocks our brokerage partner Alpaca has approved. Please note that other investments not considered and outside the universe of investments on OPTO may have characteristics similar or superior to those being used in the backtest.
This content is for informational purposes only. OPTO Markets LLC does not recommend any specific securities or investment strategies. Investing involves risk & investments may lose value, including the loss of principal. Past performance does not guarantee future results. Investors should consider their investment objectives and risks carefully before investing.
OPTO Markets LLC is not a broker-dealer, investment adviser, or member of FINRA. Please see www.optothemes.com. Securities offered by Alpaca Securities LLC (“Alpaca Securities”). Alpaca Securities
is not responsible for and is not providing the technology and services you receive from us to access and manage your brokerage account with Alpaca Securities. You firmly agree to hold Alpaca and its affiliates, owners, directors, employees, clearing firm, and agents harmless for any loss or damage arising from the use of or unavailability of the technology and services that we are providing.
Alpaca Securities is a member of FINRA and the Securities Investor Protection Corporation. Pursuant to FINRA Rule 4311, Alpaca Securities and Opto and have entered into an agreement where Alpaca provides clearing services for the Opto platform. For further information, please refer to the Alpaca Disclosure Library.
Past hypothetical backtest results do not guarantee future returns, and actual results may vary from the analysis.