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What are the building blocks for a successful options trading model?

Many investors who are getting started with options begin by analyzing historical data and end-of-day prices. Historical data is important for updating options trading models while access to deep, end-of-day historical data provides the ability to backtest options trading strategies and models before putting them into the market. Intraday snapshots can also be critical to gauge intraday volatility strategies and linkage to movements in the underlying equities or futures markets. Additionally, it’s a good idea to understand the methodology behind your vendor’s data. For example, what are the vendor’s calculation methods, sources of inputs, fits for surfaces, etc.? In summary, an experienced options data partner not only provides the key building blocks to analyze the data, they will also be in a postion to help you grow as you gain options experience.

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