Part 5: Summarization & Trade Optimization

Introduction

This final part summarizes trade performance and identifies optimal trade setups. We generate a ranked list of the best opportunities based on historical data.

Trade Success Rates by Setup

We calculate the average success rate of different trade setups based on entry time, option type, and strike distance.

This shows that ATM calls have a higher success rate than deep ITM calls.

Ranked Trade Opportunities

By analyzing composite scores, we can rank trades based on their success probability.

Key Takeaways

• Weekday matters: Wednesday and Tuesday had high success rates.
• Entry time matters: Early morning trades had higher composite scores.
• Strike distance affects performance: ATM and slightly OTM calls had the best results.

Conclusion

This final step ranks trades based on composite score and profitability.

• Certain weekdays and entry times outperform others.
• ATM & slightly OTM calls are often the best setups.
• Traders can use this ranked list to refine their strategies.

This structured, data-driven approach allows traders to focus on high-probability opportunities while minimizing risk. 🚀

With this, the blog series concludes, providing a comprehensive guide to data-driven options trading using machine learning techniques.

Future Explorations

While this project focused on identifying profitable exits, future research could explore:

• Comparing call vs. put performance at different times of the day.
• Analyzing profitability of trades entered in the first 30 minutes vs. the last 30 minutes.
• Investigating mean reversion of option premiums.