Institutions Option Database Trading Part-6

Deep Dive into Options Basics (For Data Traders)
Options are contracts giving the right but not the obligation to buy or sell an asset at a certain price before a set date. They are used for hedging, speculation, and generating income.

🛠️ Two Types:
Call Option: Right to buy an asset.

Put Option: Right to sell an asset.

Backtesting means testing a strategy using past data to check performance. Key for data-driven option trading.

Example:
Load 1-year option chain data for BANKNIFTY.

Apply rules: Buy Call when IV drops by 10% & PCR < 0.8.

Check PnL for each trade.

Filter for success rate > 65%.