Tick Data Resolution
Tick Data Resolution refers to the granularity of the price and volume information captured for every trade or quote change in the market. High resolution means capturing every single price change as it happens, which is essential for accurate backtesting and quantitative analysis.
In the context of derivatives, low resolution can obscure important market microstructure details, such as the exact sequence of orders or the speed of price discovery. High-resolution tick data allows researchers to reconstruct the order book at any point in time, providing deep insights into market behavior.
This data is the raw material for building robust models and testing trading strategies. Without high-resolution data, models are likely to miss critical signals and produce inaccurate forecasts.