What best price fit by option P/L means in math terms?
Alex Craft
I fit some algorithm predicting the distribution of stock future log returns , based on historical prices. The optimisation goal - best fit of European options premium . Done as backtesting on historical prices - start with 0 cash, and after selling millions of European Calls and Puts with various strikes, compared with actually realised outcomes from historical stock prices on expiration date - end up with 0 cash. I wonder what exactly I did, how "best option pricing fit" translates into math t