In Options Trading, What Is the ‘Proof of Concept’ for a New Algorithmic Strategy?

A PoC for an options algorithm typically involves rigorous backtesting of the strategy against historical market data. It demonstrates that the strategy's logic, such as entry/exit rules or risk management, can generate theoretical profit and manage risk effectively.

This is crucial before deploying capital in a live environment. The PoC validates the statistical edge and robustness of the model.