From b14b5884d62978f5a25f116228f887be76bdbfd2 Mon Sep 17 00:00:00 2001
From: "copilot-swe-agent[bot]" <198982749+Copilot@users.noreply.github.com>
Date: Thu, 1 Jan 2026 17:29:16 +0000
Subject: [PATCH 1/3] Add comprehensive .github/copilot-instructions.md file

Co-authored-by: nix1 <1424680+nix1@users.noreply.github.com>
---
 .github/copilot-instructions.md | 186 ++++++++++++++++++++++++++++++++
 1 file changed, 186 insertions(+)
 create mode 100644 .github/copilot-instructions.md

diff --git a/.github/copilot-instructions.md b/.github/copilot-instructions.md
new file mode 100644
index 00000000..61cbbec7
--- /dev/null
+++ b/.github/copilot-instructions.md
@@ -0,0 +1,186 @@
+# Copilot Instructions for BYE (Backtesting Yield Estimator)
+
+## Repository Overview
+
+**BYE (Backtesting Yield Estimator)** is a Python-based tool for backtesting option trading strategies on historical data, specifically focused on SPY (S&P 500 ETF) put-writing strategies. This is an early-stage POC/exploration project (toddler stage) designed for long-term investment strategies.
+
+**Repository Size**: Small (~112KB in src/)
+**Languages**: Python 3
+**Target Runtime**: Python 3.10 (CI), Python 3.12+ compatible
+**Key Dependencies**: pandas, numpy, scipy, statsmodels, pyarrow, tqdm, pytest, flake8, black, jupyter
+
+## Build and Validation Instructions
+
+### Environment Setup
+
+**IMPORTANT**: Always install setuptools and wheel BEFORE installing other dependencies to avoid numpy build issues:
+
+```bash
+python3 -m venv venv
+source venv/bin/activate
+pip install --upgrade pip
+pip install setuptools wheel
+pip install -r requirements.txt
+```
+
+**Note**: The requirements.txt pins old package versions (e.g., numpy==1.23.4) that are incompatible with Python 3.12+. The CI uses Python 3.10. For Python 3.12+, you may need to install dependencies without version pins to get compatible versions.
+
+### Linting
+
+**ALWAYS run flake8 before committing**. The CI runs two flake8 checks:
+
+1. Critical errors (will fail CI):
+```bash
+flake8 . --count --select=E9,F63,F7,F82 --show-source --statistics
+```
+
+2. Style warnings (won't fail CI):
+```bash
+flake8 . --count --exit-zero --max-complexity=10 --max-line-length=127 --statistics
+```
+
+**Expected warnings**: You may see `SyntaxWarning: invalid escape sequence '\.'` - this is expected and does not fail the build.
+
+### Testing
+
+**ALWAYS run pytest after making code changes**:
+
+```bash
+pytest
+```
+
+Or for verbose output:
+```bash
+pytest -v
+```
+
+**Test location**: All tests are in `src/tests/` directory.
+**Test files**: `test_markets.py`, `test_strategies.py`, `test_wallet.py`
+**Expected behavior**: All 5 tests should pass in under 1 second.
+
+### Running the Application
+
+The application requires historical option data from OptionsDX (not included in repo). The workflow is:
+
+1. Place SPY EOD data in `data/spy_eod_raw/` (organized by year subdirectories, monthly .txt files)
+2. Run data pipeline:
+```bash
+python 1_load.py      # Loads and joins data -> data/interim/spy_eod.parquet
+python 2_select.py    # Filters columns -> data/processed/spy_eod_put.parquet
+python 3_main.py      # Runs backtesting strategies
+```
+
+**Note**: The data directory does not exist in the repo and must be created by users.
+
+## Project Layout and Architecture
+
+### Directory Structure
+
+```
+/home/runner/work/bye/bye/
+├── .github/
+│   └── workflows/
+│       └── python-app.yml          # CI workflow (flake8 + pytest)
+├── src/                             # Main package directory
+│   ├── __init__.py
+│   ├── markets.py                   # HistoricalMarket class (iterator over quotes)
+│   ├── options.py                   # Option/Put classes
+│   ├── strategies.py                # Strategy base class, SellWeeklyPuts, SellMonthlyPuts
+│   ├── wallet.py                    # Wallet and Position classes
+│   └── tests/                       # All unit tests
+│       ├── test_markets.py
+│       ├── test_strategies.py
+│       └── test_wallet.py
+├── 1_load.py                        # Step 1: Load raw data
+├── 2_select.py                      # Step 2: Filter data
+├── 3_main.py                        # Step 3: Run backtesting
+├── requirements.txt                 # Python dependencies (pinned versions)
+├── README.md                        # User documentation
+└── LICENSE                          # MIT-style license
+```
+
+### Key Architectural Components
+
+1. **HistoricalMarket** (`src/markets.py`): Iterator that provides daily market data, handles trade execution (sell_to_open, buy, sell, close positions). Groups quotes by date and underlying price.
+
+2. **Option Classes** (`src/options.py`): Abstract Option base class with Put implementation. Handles ITM/OTM logic, expiration checks, intrinsic value calculations.
+
+3. **Strategy Pattern** (`src/strategies.py`): 
+   - Abstract `Strategy` base class with `handle_no_open_positions()` method to implement
+   - `SellWeeklyPuts`: Sells ~weekly ATM/OTM puts (Mondays to Fridays)
+   - `SellMonthlyPuts`: Sells monthly puts (30 DTE)
+   - Strategies track capital via Wallet
+
+4. **Wallet/Position** (`src/wallet.py`): Tracks cash and open/closed positions. Position tracks option, quantity (negative for short), cost, and closing details.
+
+### CI/CD Pipeline
+
+**GitHub Actions Workflow**: `.github/workflows/python-app.yml`
+- **Trigger**: Push/PR to main branch
+- **Python Version**: 3.10
+- **Steps**:
+  1. Install dependencies (pip install flake8 pytest + requirements.txt)
+  2. Lint with flake8 (critical errors will fail build)
+  3. Test with pytest (all tests must pass)
+
+**Badge**: Shows build status on README.md
+
+### Code Conventions and Known Issues
+
+**TODOs in codebase**:
+- `src/markets.py:90, 110`: Handle cases where option quotes are not found (currently may raise IndexError)
+
+**Code Style**:
+- Max line length: 127 characters
+- Max complexity: 10
+- Use of pandas DataFrames throughout
+- Type hints not consistently used
+
+**Testing Approach**:
+- Fixtures for sample quote DataFrames
+- Focus on core functionality (market iteration, position opening)
+- Limited test coverage (only 5 tests total)
+
+### Key Facts for Making Changes
+
+1. **Data Flow**: Raw data (txt) -> interim (parquet) -> processed (parquet) -> backtesting results
+2. **No .gitignore**: Repository has no root .gitignore file. Be careful not to commit venv/, data/, or cache files.
+3. **Date Handling**: Uses pandas timestamps throughout. Market quotes grouped by `[QUOTE_DATE]` and `[UNDERLYING_LAST]`.
+4. **Column Naming**: OptionsDX data uses bracketed column names like `[STRIKE]`, `[P_BID]`, `[EXPIRE_DATE]`.
+5. **Position Convention**: Negative quantity = short position, positive = long position.
+6. **Strategy Extension**: To add strategies, inherit from `Strategy` and implement `handle_no_open_positions()`.
+
+### Dependency Notes
+
+- **Critical**: Install setuptools/wheel before other packages
+- **numpy**: Version 1.23.4 in requirements.txt only works with Python 3.10, not 3.12+
+- **pandas**: Requires pyarrow for parquet support
+- **jupyter**: Full stack included for notebook development
+
+### Common Pitfalls
+
+1. **Forgetting virtual environment**: Always activate venv before installing/running
+2. **Python version mismatch**: CI uses 3.10; local development may use 3.12+
+3. **Missing data directory**: Scripts will fail if data/ directory structure doesn't exist
+4. **Flake8 warnings**: The SyntaxWarning about escape sequences is normal, doesn't fail CI
+5. **Index errors**: Market methods (buy/sell) can raise IndexError if option not found in quotes
+
+### Validation Steps
+
+Before submitting changes:
+1. ✅ Activate virtual environment
+2. ✅ Run `flake8 . --count --select=E9,F63,F7,F82 --show-source --statistics` (must have zero errors)
+3. ✅ Run `pytest -v` (all 5 tests must pass)
+4. ✅ If modifying core logic, test with sample data if available
+5. ✅ Ensure no venv/, data/, or cache files are staged for commit
+
+### Trust These Instructions
+
+These instructions have been validated by:
+- Creating a fresh virtual environment
+- Installing all dependencies (with setuptools workaround)
+- Running both flake8 checks (0 errors, expected warnings)
+- Running pytest (5/5 tests passed in 0.67s)
+- Exploring all source files and configuration
+
+**Only search for additional information if these instructions are incomplete or found to be incorrect.**

From 8032de98f8df1ecd50f8e7790d0f7851c3765c95 Mon Sep 17 00:00:00 2001
From: "copilot-swe-agent[bot]" <198982749+Copilot@users.noreply.github.com>
Date: Fri, 2 Jan 2026 12:41:30 +0000
Subject: [PATCH 2/3] Clean up code and add comprehensive test suite (55 tests
 total)

Co-authored-by: nix1 <1424680+nix1@users.noreply.github.com>
---
 .gitignore                   |  36 ++++++++
 src/markets.py               |   2 -
 src/tests/test_markets.py    | 132 +++++++++++++++++++++++++--
 src/tests/test_options.py    |  66 ++++++++++++++
 src/tests/test_strategies.py | 169 +++++++++++++++++++++++++++++++++--
 src/tests/test_wallet.py     | 168 +++++++++++++++++++++++++++++++++-
 6 files changed, 552 insertions(+), 21 deletions(-)
 create mode 100644 .gitignore
 create mode 100644 src/tests/test_options.py

diff --git a/.gitignore b/.gitignore
new file mode 100644
index 00000000..652bd744
--- /dev/null
+++ b/.gitignore
@@ -0,0 +1,36 @@
+# Python
+__pycache__/
+*.py[cod]
+*$py.class
+*.so
+.Python
+
+# Virtual environments
+venv/
+env/
+ENV/
+.venv
+
+# Testing
+.pytest_cache/
+.coverage
+htmlcov/
+*.cover
+
+# Data directories
+data/
+
+# IDE
+.vscode/
+.idea/
+*.swp
+*.swo
+*~
+
+# Distribution / packaging
+dist/
+build/
+*.egg-info/
+
+# Jupyter
+.ipynb_checkpoints/
diff --git a/src/markets.py b/src/markets.py
index f1bd3159..614e1f2e 100644
--- a/src/markets.py
+++ b/src/markets.py
@@ -1,6 +1,4 @@
-from abc import abstractmethod
 from collections.abc import Iterator
-from datetime import timedelta
 
 from src.options import Put
 from src.wallet import Position
diff --git a/src/tests/test_markets.py b/src/tests/test_markets.py
index c4fff191..251ed51d 100644
--- a/src/tests/test_markets.py
+++ b/src/tests/test_markets.py
@@ -3,6 +3,8 @@
 from pytest import fixture
 
 from src.markets import HistoricalMarket
+from src.options import Put
+from src.wallet import Position
 
 
 @fixture
@@ -15,6 +17,7 @@ def quotes_1d_df():
             "[P_ASK]": [1.1, 2.1, 3.1],
             "[QUOTE_DATE]": pd.to_datetime("2020-01-01"),
             "[EXPIRE_DATE]": pd.to_datetime("2020-01-08"),
+            "[DTE]": [7, 7, 7],
         }
     )
 
@@ -23,14 +26,15 @@ def quotes_1d_df():
 def quotes_8w_df(quotes_1d_df):
     df = pd.DataFrame()
     for i in range(8):
-        quotes_1d_df["[QUOTE_DATE]"] = pd.to_datetime("2020-01-01") + pd.Timedelta(
+        quotes_copy = quotes_1d_df.copy()
+        quotes_copy["[QUOTE_DATE]"] = pd.to_datetime("2020-01-01") + pd.Timedelta(
             days=i * 7
         )
-        quotes_1d_df["[EXPIRE_DATE]"] = pd.to_datetime("2020-01-01") + pd.Timedelta(
+        quotes_copy["[EXPIRE_DATE]"] = pd.to_datetime("2020-01-01") + pd.Timedelta(
             days=i * 7 + 7
         )
-        quotes_1d_df["[UNDERLYING_LAST]"] = 99 + i
-        df = pd.concat([df, quotes_1d_df])
+        quotes_copy["[UNDERLYING_LAST]"] = 99 + i
+        df = pd.concat([df, quotes_copy])
     return df
 
 
@@ -48,10 +52,6 @@ def test_first_date(self, quotes_1d_df):
             quotes_df=quotes_1d_df,
         )
         date, price, quotes = next(market)
-        print("Quotes:")
-        print(quotes)
-        print("Current quotes:")
-        print(market.current_quotes)
         assert date == quotes_1d_df["[QUOTE_DATE]"].iloc[0]
         assert market.current_date == quotes_1d_df["[QUOTE_DATE]"].iloc[0]
         assert_frame_equal(
@@ -72,3 +72,119 @@ def test_iteration(self, quotes_8w_df):
             i += 1
 
         assert i == 8
+
+    def test_sell_to_open_finds_closest_strike(self, quotes_1d_df):
+        """Test sell_to_open finds the option with closest strike"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)  # Advance to first date
+
+        # Request strike of 101 (closest is 100)
+        position = market.sell_to_open(ideal_strike=101, ideal_dte=7)
+        assert position.option.strike == 100
+        assert position.quantity == -1
+        assert position.cost == 2  # P_BID for strike 100
+
+    def test_sell_to_open_finds_closest_dte(self, quotes_1d_df):
+        """Test sell_to_open finds the option with closest DTE"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)
+
+        # All have DTE=7, so should still work
+        position = market.sell_to_open(ideal_strike=100, ideal_dte=5)
+        assert position.option.strike == 100
+        assert position.option.expiration == pd.to_datetime("2020-01-08")
+
+    def test_sell_to_open_creates_short_position(self, quotes_1d_df):
+        """Test sell_to_open creates a short position"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)
+
+        position = market.sell_to_open(ideal_strike=100, ideal_dte=7)
+        assert position.quantity == -1  # Short position
+        assert position.cost > 0  # Premium received
+
+    def test_buy_returns_ask_price(self, quotes_1d_df):
+        """Test buy method returns the ask price"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)
+
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        cost = market.buy(put)
+        assert cost == 2.1  # P_ASK for strike 100
+
+    def test_sell_returns_bid_price(self, quotes_1d_df):
+        """Test sell method returns the bid price"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)
+
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        price = market.sell(put)
+        assert price == 2  # P_BID for strike 100
+
+    def test_close_long_position_sells_at_bid(self, quotes_1d_df):
+        """Test closing a long position sells at bid price"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)
+
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        position = Position(option=put, quantity=1, cost=2.1)
+        close_value = market.close(position)
+        assert close_value == 2  # quantity * bid = 1 * 2
+
+    def test_close_short_position_buys_at_ask(self, quotes_1d_df):
+        """Test closing a short position buys at ask price"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)
+
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        position = Position(option=put, quantity=-1, cost=2.0)
+        close_value = market.close(position)
+        assert close_value == -2.1  # quantity * ask = -1 * 2.1
+
+    def test_close_expires_worthless_otm(self, quotes_1d_df):
+        """Test that OTM option expiring today has zero close value"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)
+        market.current_date = pd.to_datetime("2020-01-08")  # Expiration date
+
+        # OTM put (strike 90, underlying 99)
+        put = Put(strike=90, expiration=pd.to_datetime("2020-01-08"))
+        position = Position(option=put, quantity=-1, cost=0.1)
+        close_value = market.close(position)
+        assert close_value == 0  # Expires worthless
+
+    def test_close_dry_run_doesnt_close_position(self, quotes_1d_df):
+        """Test that dry_run=True doesn't actually close the position"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)
+
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        position = Position(option=put, quantity=-1, cost=2.0)
+
+        # Dry run should return value but not close
+        close_value = market.close(position, dry_run=True)
+        assert close_value == -2.1
+        assert position.close_value is None  # Not actually closed
+        assert position.closed_at is None
+
+    def test_close_not_dry_run_closes_position(self, quotes_1d_df):
+        """Test that dry_run=False actually closes the position"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)
+
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        position = Position(option=put, quantity=-1, cost=2.0)
+
+        close_value = market.close(position, dry_run=False)
+        assert close_value == -2.1
+        assert position.close_value == -2.1  # Actually closed
+        assert position.closed_at == market.current_date
+
+    def test_get_quotes_returns_current_quotes(self, quotes_1d_df):
+        """Test get_quotes returns current market quotes"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        next(market)
+
+        quotes = market.get_quotes()
+        assert quotes is not None
+        assert len(quotes) == 3  # Three strikes
diff --git a/src/tests/test_options.py b/src/tests/test_options.py
new file mode 100644
index 00000000..de91da9f
--- /dev/null
+++ b/src/tests/test_options.py
@@ -0,0 +1,66 @@
+import pandas as pd
+
+from src.options import Put
+
+
+class TestPut:
+    """Test the Put option class"""
+
+    def test_put_init(self):
+        """Test Put initialization"""
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        assert put.strike == 100
+        assert put.expiration == pd.to_datetime("2020-01-08")
+
+    def test_put_is_itm_when_underlying_below_strike(self):
+        """Test that Put is ITM when underlying is below strike"""
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        assert put.is_itm(99) is True
+        assert put.is_itm(95) is True
+        assert put.is_itm(50) is True
+
+    def test_put_is_otm_when_underlying_above_strike(self):
+        """Test that Put is OTM when underlying is above strike"""
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        assert put.is_itm(101) is False
+        assert put.is_itm(105) is False
+        assert put.is_itm(150) is False
+
+    def test_put_is_atm_when_underlying_equals_strike(self):
+        """Test that Put is OTM when underlying equals strike"""
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        assert put.is_itm(100) is False
+
+    def test_put_is_expiring(self):
+        """Test is_expiring method"""
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        assert put.is_expiring(pd.to_datetime("2020-01-08")) is True
+        assert put.is_expiring(pd.to_datetime("2020-01-07")) is False
+        assert put.is_expiring(pd.to_datetime("2020-01-09")) is False
+
+    def test_put_is_expired(self):
+        """Test is_expired method"""
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        assert put.is_expired(pd.to_datetime("2020-01-09")) is True
+        assert put.is_expired(pd.to_datetime("2020-01-10")) is True
+        assert put.is_expired(pd.to_datetime("2020-01-08")) is False
+        assert put.is_expired(pd.to_datetime("2020-01-07")) is False
+
+    def test_put_intrinsic_value_when_itm(self):
+        """Test intrinsic value when Put is ITM"""
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        assert put.intrinsic_value(95) == 5
+        assert put.intrinsic_value(90) == 10
+        assert put.intrinsic_value(99) == 1
+
+    def test_put_intrinsic_value_when_otm(self):
+        """Test intrinsic value when Put is OTM"""
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        assert put.intrinsic_value(105) == 0
+        assert put.intrinsic_value(110) == 0
+        assert put.intrinsic_value(100) == 0
+
+    def test_put_repr(self):
+        """Test Put string representation"""
+        put = Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+        assert repr(put) == "Put(100, 2020-01-08 00:00:00)"
diff --git a/src/tests/test_strategies.py b/src/tests/test_strategies.py
index 1fb21270..8987c678 100644
--- a/src/tests/test_strategies.py
+++ b/src/tests/test_strategies.py
@@ -3,7 +3,7 @@
 from pytest import fixture
 
 from src.markets import HistoricalMarket
-from src.strategies import SellWeeklyPuts
+from src.strategies import SellWeeklyPuts, SellMonthlyPuts
 
 
 @fixture
@@ -16,33 +16,184 @@ def quotes_1d_df():
             "[P_ASK]": [0.2, 1.1, 10.1],
             "[QUOTE_DATE]": pd.to_datetime("2020-01-01"),
             "[EXPIRE_DATE]": pd.to_datetime("2020-01-08"),
-            "[DTE]": 7,
+            "[DTE]": [7, 7, 7],
         }
     )
 
 
+@fixture
+def quotes_multi_day_df():
+    """Create quotes for multiple days"""
+    df = pd.DataFrame()
+    for i in range(3):
+        day_quotes = pd.DataFrame(
+            {
+                "[STRIKE]": [90, 100, 110],
+                "[UNDERLYING_LAST]": [99.5, 99.5, 99.5],
+                "[P_BID]": [0.1, 1.0, 10.0],
+                "[P_ASK]": [0.2, 1.1, 10.1],
+                "[QUOTE_DATE]": pd.to_datetime("2020-01-01") + pd.Timedelta(days=i),
+                "[EXPIRE_DATE]": pd.to_datetime("2020-01-08"),
+                "[DTE]": [7 - i, 7 - i, 7 - i],
+            }
+        )
+        df = pd.concat([df, day_quotes])
+    return df
+
+
 class TestSellWeeklyPuts:
-    def _check_strategy(self, cash, value, market_value, open_positions):
-        assert self.strategy.wallet.cash == cash
-        assert self.strategy.get_current_value() == pytest.approx(value)
-        assert self.strategy.get_current_market_value() == pytest.approx(market_value)
-        assert len(self.strategy.get_open_positions()) == open_positions
+    def _check_strategy(self, strategy, cash, value, market_value, open_positions):
+        assert strategy.wallet.cash == cash
+        assert strategy.get_current_value() == pytest.approx(value)
+        assert strategy.get_current_market_value() == pytest.approx(market_value)
+        assert len(strategy.get_open_positions()) == open_positions
 
     def test_opening_new_positions(self, quotes_1d_df):
         market = HistoricalMarket(
             quotes_df=quotes_1d_df,
         )
-        self.strategy = SellWeeklyPuts(market)
+        strategy = SellWeeklyPuts(market)
         market.__next__()
-        self.strategy.run()
+        strategy.run()
 
         # Expectation: the strategy should sell 1 ~ATM put for 1.0
         # - Starting cash = 0.0
         # - Ideal DTE is 3, but no choice here, the closest one is 7
         # - Ideal strike = 99.5, the closest one is 100
         self._check_strategy(
+            strategy,
             cash=1.0,  # ends up with 1.0 cash from the premium
             value=0.5,  # 1.0 (cash)  -0.5 (simplified value of the short OOM put)
             market_value=-0.1,  # 1.0 (cash) -1.1 (market ask value of the short OOM put)
             open_positions=1,
         )
+
+    def test_ideal_strike_atm(self, quotes_1d_df):
+        """Test that ATM strike is selected by default"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellWeeklyPuts(market, ideal_strike=1.0)
+        next(market)
+        strategy.run()
+
+        positions = strategy.get_open_positions()
+        assert len(positions) == 1
+        # Should select strike closest to 99.5 * 1.0 = 99.5, which is 100
+        assert positions[0].option.strike == 100
+
+    def test_ideal_strike_otm(self, quotes_1d_df):
+        """Test that OTM strike is selected when ideal_strike < 1.0"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellWeeklyPuts(market, ideal_strike=0.9)
+        next(market)
+        strategy.run()
+
+        positions = strategy.get_open_positions()
+        assert len(positions) == 1
+        # Should select strike closest to 99.5 * 0.9 = 89.55, which is 90
+        assert positions[0].option.strike == 90
+
+    def test_ideal_strike_itm(self, quotes_1d_df):
+        """Test that ITM strike is selected when ideal_strike > 1.0"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellWeeklyPuts(market, ideal_strike=1.1)
+        next(market)
+        strategy.run()
+
+        positions = strategy.get_open_positions()
+        assert len(positions) == 1
+        # Should select strike closest to 99.5 * 1.1 = 109.45, which is 110
+        assert positions[0].option.strike == 110
+
+    def test_hold_the_strike_false(self, quotes_multi_day_df):
+        """Test that strike adjusts with market when hold_the_strike=False"""
+        market = HistoricalMarket(quotes_df=quotes_multi_day_df)
+        strategy = SellWeeklyPuts(market, ideal_strike=1.0, hold_the_strike=False)
+
+        # Just test that it initializes
+        assert strategy.hold_the_strike is False
+        assert strategy.last_ideal_strike is None
+
+    def test_write_put_adds_position(self, quotes_1d_df):
+        """Test that write_put adds a position to the wallet"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellWeeklyPuts(market)
+        next(market)
+
+        initial_cash = strategy.wallet.cash
+        strategy.write_put(ideal_strike=100, ideal_dte=7)
+
+        assert len(strategy.wallet.positions) == 1
+        assert strategy.wallet.cash > initial_cash  # Received premium
+
+    def test_get_ideal_dte_monday(self, quotes_1d_df):
+        """Test ideal DTE calculation on Monday"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellWeeklyPuts(market)
+        next(market)
+
+        # 2020-01-01 is a Wednesday (weekday=2), so ideal_dte = 5-2 = 3
+        market.current_date = pd.to_datetime("2020-01-01")
+        ideal_dte = strategy._get_ideal_dte()
+        assert ideal_dte == 3
+
+    def test_get_ideal_dte_friday(self, quotes_1d_df):
+        """Test ideal DTE calculation on Friday"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellWeeklyPuts(market)
+        next(market)
+
+        # 2020-01-03 is a Friday (weekday=4), so ideal_dte = 5-4 = 1 (next day is Saturday)
+        market.current_date = pd.to_datetime("2020-01-03")
+        ideal_dte = strategy._get_ideal_dte()
+        assert ideal_dte == 1  # Tomorrow (Saturday counts as expiry day)
+
+    def test_repr_without_hold(self, quotes_1d_df):
+        """Test string representation without hold_the_strike"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellWeeklyPuts(market, ideal_strike=0.9, hold_the_strike=False)
+        assert repr(strategy) == "W(0.9)"
+
+    def test_repr_with_hold(self, quotes_1d_df):
+        """Test string representation with hold_the_strike"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellWeeklyPuts(market, ideal_strike=0.9, hold_the_strike=True)
+        assert repr(strategy) == "WH(0.9)"
+
+
+class TestSellMonthlyPuts:
+    def test_monthly_inherits_from_weekly(self, quotes_1d_df):
+        """Test that SellMonthlyPuts inherits from SellWeeklyPuts"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellMonthlyPuts(market)
+        assert isinstance(strategy, SellWeeklyPuts)
+
+    def test_ideal_dte_is_30(self, quotes_1d_df):
+        """Test that ideal DTE for monthly is 30 days"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellMonthlyPuts(market)
+        next(market)
+
+        ideal_dte = strategy._get_ideal_dte()
+        assert ideal_dte == 30
+
+    def test_repr_without_hold(self, quotes_1d_df):
+        """Test string representation without hold_the_strike"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellMonthlyPuts(market, ideal_strike=0.9, hold_the_strike=False)
+        assert repr(strategy) == "M(0.9)"
+
+    def test_repr_with_hold(self, quotes_1d_df):
+        """Test string representation with hold_the_strike"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellMonthlyPuts(market, ideal_strike=1.1, hold_the_strike=True)
+        assert repr(strategy) == "MH(1.1)"
+
+    def test_opening_position(self, quotes_1d_df):
+        """Test that monthly strategy opens positions"""
+        market = HistoricalMarket(quotes_df=quotes_1d_df)
+        strategy = SellMonthlyPuts(market)
+        next(market)
+        strategy.run()
+
+        positions = strategy.get_open_positions()
+        assert len(positions) == 1
diff --git a/src/tests/test_wallet.py b/src/tests/test_wallet.py
index 6fe3d7cd..c46ed0aa 100644
--- a/src/tests/test_wallet.py
+++ b/src/tests/test_wallet.py
@@ -1,8 +1,172 @@
-from src.wallet import Wallet
+import pandas as pd
+from pytest import fixture
+
+from src.options import Put
+from src.wallet import Wallet, Position
+
+
+@fixture
+def sample_put():
+    """Create a sample Put option"""
+    return Put(strike=100, expiration=pd.to_datetime("2020-01-08"))
+
+
+@fixture
+def sample_position(sample_put):
+    """Create a sample short position"""
+    return Position(option=sample_put, quantity=-1, cost=2.0)
+
+
+class TestPosition:
+    """Test the Position class"""
+
+    def test_position_init(self, sample_put):
+        """Test Position initialization"""
+        position = Position(option=sample_put, quantity=-1, cost=2.0)
+        assert position.option == sample_put
+        assert position.quantity == -1
+        assert position.cost == 2.0
+        assert position.close_value is None
+        assert position.closed_at is None
+
+    def test_position_long(self, sample_put):
+        """Test long position has positive quantity"""
+        position = Position(option=sample_put, quantity=1, cost=2.0)
+        assert position.quantity == 1
+
+    def test_position_short(self, sample_put):
+        """Test short position has negative quantity"""
+        position = Position(option=sample_put, quantity=-1, cost=2.0)
+        assert position.quantity == -1
+
+    def test_position_is_expired(self, sample_position):
+        """Test is_expired method"""
+        assert sample_position.is_expired(pd.to_datetime("2020-01-09")) is True
+        assert sample_position.is_expired(pd.to_datetime("2020-01-08")) is False
+        assert sample_position.is_expired(pd.to_datetime("2020-01-07")) is False
+
+    def test_position_is_expiring(self, sample_position):
+        """Test is_expiring method"""
+        assert sample_position.is_expiring(pd.to_datetime("2020-01-08")) is True
+        assert sample_position.is_expiring(pd.to_datetime("2020-01-07")) is False
+        assert sample_position.is_expiring(pd.to_datetime("2020-01-09")) is False
+
+    def test_position_close(self, sample_position):
+        """Test closing a position"""
+        close_date = pd.to_datetime("2020-01-07")
+        close_value = -1.5
+        sample_position.close(close_date, close_value)
+        assert sample_position.close_value == -1.5
+        assert sample_position.closed_at == close_date
+
+    def test_position_repr(self, sample_position):
+        """Test Position string representation"""
+        repr_str = repr(sample_position)
+        assert "Position" in repr_str
+        assert "Put(100" in repr_str
+        assert "-1" in repr_str
+        assert "2.0" in repr_str
 
 
 class TestWallet:
-    def test_instance(self):
+    """Test the Wallet class"""
+
+    def test_wallet_init_with_zero(self):
+        """Test Wallet initialization with zero cash"""
         wallet = Wallet(0)
         assert wallet.cash == 0
         assert wallet.positions == []
+
+    def test_wallet_init_with_cash(self):
+        """Test Wallet initialization with starting cash"""
+        wallet = Wallet(1000)
+        assert wallet.cash == 1000
+        assert wallet.positions == []
+
+    def test_wallet_add_position_updates_cash(self, sample_position):
+        """Test adding position updates cash when update_cash=True"""
+        wallet = Wallet(1000)
+        wallet.add_position(sample_position, update_cash=True)
+        # For short position: cash -= (-1) * 2.0 = cash += 2.0
+        assert wallet.cash == 1002.0
+        assert len(wallet.positions) == 1
+
+    def test_wallet_add_position_no_cash_update(self, sample_position):
+        """Test adding position without updating cash"""
+        wallet = Wallet(1000)
+        wallet.add_position(sample_position, update_cash=False)
+        assert wallet.cash == 1000
+        assert len(wallet.positions) == 1
+
+    def test_wallet_add_long_position(self, sample_put):
+        """Test adding a long position decreases cash"""
+        wallet = Wallet(1000)
+        long_position = Position(option=sample_put, quantity=1, cost=2.0)
+        wallet.add_position(long_position, update_cash=True)
+        # For long position: cash -= 1 * 2.0 = 998
+        assert wallet.cash == 998.0
+
+    def test_wallet_add_multiple_positions(self, sample_put):
+        """Test adding multiple positions"""
+        wallet = Wallet(1000)
+        pos1 = Position(option=sample_put, quantity=-1, cost=2.0)
+        pos2 = Position(option=sample_put, quantity=-1, cost=3.0)
+        wallet.add_position(pos1, update_cash=True)
+        wallet.add_position(pos2, update_cash=True)
+        assert wallet.cash == 1005.0  # 1000 + 2 + 3
+        assert len(wallet.positions) == 2
+
+    def test_wallet_get_expired_positions(self, sample_put):
+        """Test getting expired positions"""
+        wallet = Wallet(0)
+        pos1 = Position(option=sample_put, quantity=-1, cost=2.0)
+        pos2_put = Put(strike=105, expiration=pd.to_datetime("2020-01-15"))
+        pos2 = Position(option=pos2_put, quantity=-1, cost=3.0)
+        wallet.add_position(pos1, update_cash=False)
+        wallet.add_position(pos2, update_cash=False)
+
+        # On 2020-01-10, first position is expired, second is not
+        expired = wallet.get_expired_positions(pd.to_datetime("2020-01-10"))
+        assert len(expired) == 1
+        assert expired[0].option.expiration == pd.to_datetime("2020-01-08")
+
+    def test_wallet_get_expiring_positions(self, sample_put):
+        """Test getting expiring positions"""
+        wallet = Wallet(0)
+        pos1 = Position(option=sample_put, quantity=-1, cost=2.0)
+        pos2_put = Put(strike=105, expiration=pd.to_datetime("2020-01-15"))
+        pos2 = Position(option=pos2_put, quantity=-1, cost=3.0)
+        wallet.add_position(pos1, update_cash=False)
+        wallet.add_position(pos2, update_cash=False)
+
+        # On 2020-01-08, first position is expiring
+        expiring = wallet.get_expiring_positions(pd.to_datetime("2020-01-08"))
+        assert len(expiring) == 1
+        assert expiring[0].option.expiration == pd.to_datetime("2020-01-08")
+
+    def test_wallet_get_open_positions(self, sample_put):
+        """Test getting open (not expired) positions"""
+        wallet = Wallet(0)
+        pos1 = Position(option=sample_put, quantity=-1, cost=2.0)
+        pos2_put = Put(strike=105, expiration=pd.to_datetime("2020-01-15"))
+        pos2 = Position(option=pos2_put, quantity=-1, cost=3.0)
+        wallet.add_position(pos1, update_cash=False)
+        wallet.add_position(pos2, update_cash=False)
+
+        # On 2020-01-10, only second position is still open
+        open_pos = wallet.get_open_positions(pd.to_datetime("2020-01-10"))
+        assert len(open_pos) == 1
+        assert open_pos[0].option.expiration == pd.to_datetime("2020-01-15")
+
+    def test_wallet_get_open_positions_all_open(self, sample_put):
+        """Test getting open positions when all are open"""
+        wallet = Wallet(0)
+        pos1 = Position(option=sample_put, quantity=-1, cost=2.0)
+        pos2_put = Put(strike=105, expiration=pd.to_datetime("2020-01-15"))
+        pos2 = Position(option=pos2_put, quantity=-1, cost=3.0)
+        wallet.add_position(pos1, update_cash=False)
+        wallet.add_position(pos2, update_cash=False)
+
+        # On 2020-01-05, both positions are still open
+        open_pos = wallet.get_open_positions(pd.to_datetime("2020-01-05"))
+        assert len(open_pos) == 2

From 2687cb1e671e463686bce46dc7ea3c70d69bab74 Mon Sep 17 00:00:00 2001
From: "copilot-swe-agent[bot]" <198982749+Copilot@users.noreply.github.com>
Date: Sun, 4 Jan 2026 21:06:21 +0000
Subject: [PATCH 3/3] Update documentation and add docstrings to address review
 feedback

Co-authored-by: nix1 <1424680+nix1@users.noreply.github.com>
---
 .github/copilot-instructions.md | 16 +++++++++-------
 src/__init__.py                 |  6 ++++++
 src/markets.py                  |  6 ++++++
 src/options.py                  |  7 +++++++
 src/strategies.py               |  6 ++++++
 src/tests/test_strategies.py    |  4 ++--
 src/wallet.py                   |  8 ++++++++
 7 files changed, 44 insertions(+), 9 deletions(-)

diff --git a/.github/copilot-instructions.md b/.github/copilot-instructions.md
index 61cbbec7..9a03de3a 100644
--- a/.github/copilot-instructions.md
+++ b/.github/copilot-instructions.md
@@ -55,8 +55,8 @@ pytest -v
 ```
 
 **Test location**: All tests are in `src/tests/` directory.
-**Test files**: `test_markets.py`, `test_strategies.py`, `test_wallet.py`
-**Expected behavior**: All 5 tests should pass in under 1 second.
+**Test files**: `test_markets.py`, `test_options.py`, `test_strategies.py`, `test_wallet.py`
+**Expected behavior**: All 55 tests should pass in under 1 second.
 
 ### Running the Application
 
@@ -77,7 +77,7 @@ python 3_main.py      # Runs backtesting strategies
 ### Directory Structure
 
 ```
-/home/runner/work/bye/bye/
+./
 ├── .github/
 │   └── workflows/
 │       └── python-app.yml          # CI workflow (flake8 + pytest)
@@ -89,6 +89,7 @@ python 3_main.py      # Runs backtesting strategies
 │   ├── wallet.py                    # Wallet and Position classes
 │   └── tests/                       # All unit tests
 │       ├── test_markets.py
+│       ├── test_options.py
 │       ├── test_strategies.py
 │       └── test_wallet.py
 ├── 1_load.py                        # Step 1: Load raw data
@@ -96,6 +97,7 @@ python 3_main.py      # Runs backtesting strategies
 ├── 3_main.py                        # Step 3: Run backtesting
 ├── requirements.txt                 # Python dependencies (pinned versions)
 ├── README.md                        # User documentation
+├── .gitignore                       # Git ignore file
 └── LICENSE                          # MIT-style license
 ```
 
@@ -139,12 +141,12 @@ python 3_main.py      # Runs backtesting strategies
 **Testing Approach**:
 - Fixtures for sample quote DataFrames
 - Focus on core functionality (market iteration, position opening)
-- Limited test coverage (only 5 tests total)
+- Comprehensive test coverage (55 tests total)
 
 ### Key Facts for Making Changes
 
 1. **Data Flow**: Raw data (txt) -> interim (parquet) -> processed (parquet) -> backtesting results
-2. **No .gitignore**: Repository has no root .gitignore file. Be careful not to commit venv/, data/, or cache files.
+2. **Git Ignore**: Repository has a .gitignore file that excludes venv/, data/, and cache files.
 3. **Date Handling**: Uses pandas timestamps throughout. Market quotes grouped by `[QUOTE_DATE]` and `[UNDERLYING_LAST]`.
 4. **Column Naming**: OptionsDX data uses bracketed column names like `[STRIKE]`, `[P_BID]`, `[EXPIRE_DATE]`.
 5. **Position Convention**: Negative quantity = short position, positive = long position.
@@ -170,7 +172,7 @@ python 3_main.py      # Runs backtesting strategies
 Before submitting changes:
 1. ✅ Activate virtual environment
 2. ✅ Run `flake8 . --count --select=E9,F63,F7,F82 --show-source --statistics` (must have zero errors)
-3. ✅ Run `pytest -v` (all 5 tests must pass)
+3. ✅ Run `pytest -v` (all 55 tests must pass)
 4. ✅ If modifying core logic, test with sample data if available
 5. ✅ Ensure no venv/, data/, or cache files are staged for commit
 
@@ -180,7 +182,7 @@ These instructions have been validated by:
 - Creating a fresh virtual environment
 - Installing all dependencies (with setuptools workaround)
 - Running both flake8 checks (0 errors, expected warnings)
-- Running pytest (5/5 tests passed in 0.67s)
+- Running pytest (55/55 tests passed in <0.5s)
 - Exploring all source files and configuration
 
 **Only search for additional information if these instructions are incomplete or found to be incorrect.**
diff --git a/src/__init__.py b/src/__init__.py
index e69de29b..c28b38e2 100644
--- a/src/__init__.py
+++ b/src/__init__.py
@@ -0,0 +1,6 @@
+"""
+BYE (Backtesting Yield Estimator) - A Python tool for backtesting option trading strategies.
+
+This package provides tools for backtesting option trading strategies on historical data,
+with a focus on SPY (S&P 500 ETF) put-writing strategies for long-term investment.
+"""
diff --git a/src/markets.py b/src/markets.py
index 614e1f2e..6bf6e87b 100644
--- a/src/markets.py
+++ b/src/markets.py
@@ -1,3 +1,9 @@
+"""
+Historical market data management and trading execution.
+
+This module provides the HistoricalMarket class which manages market state,
+iterates through historical quotes, and executes trades (buy, sell, open, close positions).
+"""
 from collections.abc import Iterator
 
 from src.options import Put
diff --git a/src/options.py b/src/options.py
index ee8a89d1..e8f1e74e 100644
--- a/src/options.py
+++ b/src/options.py
@@ -1,3 +1,10 @@
+"""
+Option contract classes for trading strategies.
+
+This module provides the abstract Option base class and the Put implementation
+for representing option contracts with strike prices, expiration dates, and
+methods for determining in-the-money status and intrinsic value.
+"""
 from abc import abstractmethod
 
 
diff --git a/src/strategies.py b/src/strategies.py
index 4edd426c..76bdb5eb 100644
--- a/src/strategies.py
+++ b/src/strategies.py
@@ -1,3 +1,9 @@
+"""
+Trading strategy implementations for backtesting.
+
+This module provides the abstract Strategy base class and concrete implementations
+like SellWeeklyPuts and SellMonthlyPuts for backtesting option trading strategies.
+"""
 from abc import abstractmethod
 
 from src.wallet import Wallet
diff --git a/src/tests/test_strategies.py b/src/tests/test_strategies.py
index 8987c678..b1698c95 100644
--- a/src/tests/test_strategies.py
+++ b/src/tests/test_strategies.py
@@ -125,8 +125,8 @@ def test_write_put_adds_position(self, quotes_1d_df):
         assert len(strategy.wallet.positions) == 1
         assert strategy.wallet.cash > initial_cash  # Received premium
 
-    def test_get_ideal_dte_monday(self, quotes_1d_df):
-        """Test ideal DTE calculation on Monday"""
+    def test_get_ideal_dte_wednesday(self, quotes_1d_df):
+        """Test ideal DTE calculation on Wednesday"""
         market = HistoricalMarket(quotes_df=quotes_1d_df)
         strategy = SellWeeklyPuts(market)
         next(market)
diff --git a/src/wallet.py b/src/wallet.py
index e4b05d6b..c4e47c0c 100644
--- a/src/wallet.py
+++ b/src/wallet.py
@@ -1,3 +1,11 @@
+"""
+Position and wallet management for tracking trades and capital.
+
+This module provides the Position class for representing individual trades
+and the Wallet class for managing cash and tracking open/closed positions.
+"""
+
+
 class Position:
     def __init__(self, option, quantity, cost):
         self.option = option