Part 3: Hypothesis Testing for Profitable Exits

Overview

This post explores whether options reach predefined profit targets and identifies optimal trade entry times.

Key Question Explored

• How likely is it that an option reaches a certain percentage gain (e.g., 5%, 10%, 15%) later in the day?

Key Functions & Outputs

• check_profitable_exit(): Evaluates whether an option hits predefined profit targets.
• Statistical significance tests (e.g., T-tests, confidence intervals) to determine the reliability of our findings.

Findings from this section inform strategy development, helping traders maximize returns.