Trading Lab
Home IV Smile Option Prices IV Data Experiments
Home/Experiments/IV Backtest

IV Backtest

Delta-neutral diagonal grid backtests — IV contango, term structure, and hit rate analysis.

V7: Cross-Strike 9:30 Estimate

Single day, all July call strikes. At 9:30, snapshot each contract's IV. Forecast BSM price all day. Shows which strikes have biggest error, how IV drift differs by moneyness.

v72026-07-03K=3.4-4.8

V9: Next-Month Contract 9:30 Estimate

Same as v7 but next-month (August) contracts. DTE=54 vs DTE=19. Tests how higher DTE affects 9:30 IV estimate accuracy — lower gamma, less near-expiry uncertainty, more time value.

v92026-07-03DTE=54, K=3.6-4.8

V10: Full Diagonal Grid (All Months)

All near-far month combos (5 months = 10 pairs), CC and PP only (only same-type can cancel delta with options). No underlying hedge. Tests which month pair and strike combo gives best natural delta neutrality.

v102026-07-03CC/PP × All month pairs × All strikes

V14: M1-M4 Term Structure Diagonal Grid

Delta-neutral diagonal grid across all month-pair combinations (M1-M4). Tests which term structure pair × option type × IV regime works best. PP+contango M2→M4 = 87% hit rate. Backwardation: flip the trade.

v14Jun 1 – Jul 11, 2026Δ-neutral, profit limit +0.01