Stock Market & Finance

Introduction In this section, we apply logistic regression and clustering techniques to better understand trade profitability. We analyze whether specific attributes—such as time of entry, moneyness, and strike distance—affect the likelihood of hitting a profit target. We also explore Cohen’s d effect size measurement and perform survival analysis to determine trade longevity. Logistic Regression for Profit Prediction To predict the probability of an option reaching its profit target,...

Overview This post explores whether options reach predefined profit targets and identifies optimal trade entry times. Key Question Explored Key Functions & Outputs Findings from this section inform strategy development, helping traders maximize returns.

Overview Before diving into hypothesis testing, we need to clean, preprocess, and analyze our dataset. This post walks through the process of merging options and underlying asset data, labeling moneyness, and adding technical indicators. Key Steps Key Functions & Outputs This stage provides an intuitive understanding of how options behave relative to the underlying asset, setting the stage for deeper analysis.

Overview The first step in any machine learning project is gathering the necessary data. In this post, we outline how we collect and structure our options trading dataset. We focus on intraday price movements of options contracts and underlying assets, ensuring that we have high-quality data to drive our analysis. Data Sources & Collection Process Key Functions & Outputs This foundational step ensures that our data is complete...

Introduction to the Blog Series Options trading is a sophisticated financial endeavor that requires a deep understanding of market movements, risk management, and statistical probabilities. In this blog series, we explore how machine learning can be leveraged to analyze options data, identify profitable trading patterns, and optimize trading strategies. Using a structured pipeline, we conduct an exploratory data analysis, apply hypothesis testing, and use statistical modeling to uncover...