Paper Trading Options Pricing

Alpaca Trading
1

Hi All,

I am testing some quick in quick out options strategies. I understand1-minute data on stock prices is delayed by 15 on the paper trading endpoints. I have an alternate source for live data that I have been using for years. My question is, are the options chains-purchase execution-sale execution based on 15 minute delayed options pricing? Again, I understand the options pricing on paper trading is modeled but is it based on real time data or 15 minute delayed data.

Doug

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@DougFish First, Alpaca data doesn’t depend upon the account (ie paper or live). What type of data one can access is soley dependant uopn ones data subscription. By default everyone has access to the free Basic subscription. One can however sign up for the Algo Trader Plus subscription (see here). The only reason API keys are used to fetch data is so the system 1) can find the account associated with the keys 2) lookup the owner ID of that account then 3) lookup which data subscription is associated with that owner ID. Since all accounts (paper and live) held by an owner have the same owner ID, any API keys can be used (paper or live) to access market data and it will be the same data. There isn’t ‘paper trading’ data, but rather either the free basic or the Algo Trader Plus data.

But back to the question “[option trading data] is modeled but is it based on real time data or 15 minute delayed data” ? If one has an Algo Trader Plus subscription, one has access to full market real time OPRA data. It’s not delayed. Ensure to specify feed=opra. If one is using the free Basic subscription then due to licensing real time OPRA data is not available.

So, If one is using the free Basic subscription, one cannot access the most recent 15 minutes of data. This is the case with historical_trades and historical_bars. The data isn’t exactly ‘delayed’ rather you will simply get an error trying to get the most current data. Other endpoints such as latest_quotes or latest_trades are by definition ‘real time’. Therefore these endpoints have a parameter choice of feed=indicative. This returns option data based upon real time OPRA data but it’s randomized a bit. It’s not real data and should not be used for live trading but it provides numbers to use for debugging one’s code.

Hope that helps.

3

Thank you Dan,

I am currently on the free version and while I do intend to move to the paid version at some point, it will not be for some time. I guess my question breaks down to this, if I use an alterative source for live 1-minute stock data to trigger entry into an option contract on my paper account should I delay that data by 15 minutes? Example, my live data tells me to buy an options contract at 10:20AM would I delay the paper options purchase to 10:35AM (its a market purchase)? Again, I know paper options purchases and sales are not perfect but I am testing my thesis.

Doug

1 Like
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Tested my strategy today on both live data and live data delayed by 15 minutes. My strategy has an ok win rate on random entries so its hard to tell. But using live data to trigger a market purchase of an option contract and set a limit sell immediately to get an understanding of the data, my strategy had a win rate of 45%. When the same strategy and predefined targets was applied to the same data delayed by 15 minutes the win rate went to 82%. I will need to run this test a few more days but right now it looks like the options chain data in the paper trading account is delayed by 15 minutes.

Doug