Key takeaways
- Definitions are deliberately strict; they match the way each term is used inside reports.
- Where a term has India-specific meaning, the India-specific reading is used.
- Headline metrics are always 'Historical' — they describe the past, not the future.
How to use this glossary
This glossary defines every recurring term in the OptionScience library. Definitions are written for an independent learner and match the way the term is used inside report pages and the Performance dashboard. Where a term has an India-specific meaning, that meaning is the one used.
A separate, expanded glossary of terms is rendered visually below; this article's checklist surfaces the most-used entries as quick-reference items.
Common mistakes
- Using 'edge' loosely instead of as a net-of-costs measurement.
- Conflating 'profit factor' with 'win rate'.
- Mixing 'historical CAGR' with 'expected return'.
How this appears in OptionScience reports
Definitions match the metric labels used on report detail pages and on the Performance dashboard.
Practical educational example
Terms are defined in the way they are used inside OptionScience reports, so the same definition applies wherever you encounter the term on the site.
Checklist
- Backtest — historical simulation of a fixed rule
- Historical Backtest CAGR — annualised historical return of the backtested rule, net of stated assumptions
- Historical Win Rate — share of historical observations with positive outcomes
- Historical Profit Factor — gross historical positive outcomes divided by gross historical negative outcomes
- Historical Expectancy — average historical outcome per observation, net of stated assumptions
- Max Historical Drawdown — largest peak-to-trough decline of the historical equity curve
- Slippage — modelled difference between intended and realised execution price
- Walk-forward — evaluation on rolling, non-overlapping out-of-sample windows
- Survivorship bias — distortion caused by removing failed instruments from a dataset
Apply the method
Read a full historical study using this discipline.
Educational only. Nothing in this note is investment advice, a recommendation, a trading call, a tip, a signal, or a price target. Examples are illustrative — never live market guidance. OptionScience publishes historical research material for independent study. We do not offer investment advice, trading advice, recommendations, signals, calls, tips, or price targets.