Options Strategies for ML Model

[+5] u/Spiritual_Bat7343: couple thoughts since youre asking for the options expression specifically. first the horizon. your signal is weekly, monday open to friday, but youre reaching for 30dte calls. that mismatch means youre buying ~25 days of theta and vega you have no thesis on. use weekly dated options, roughly 5dte, so the contract actually expires around your decision window instead of carrying exposure you dont have a view on. second, structure. your model predicts hitting a specific +1% hurdle and your rule is to sell when it hits. that is the textbook case for a call debit spread, long atm and short right around the +1% target strike. it caps profit exactly where you were going to exit anyway, so the capped upside costs you nothing, and it cheapens entry and cuts the theta and vega bleed. so yes, the bull call spread is better here, not despite your exit rule but because of it. third, why defined risk matters at a 72% hit rate: the long call's problem is the 28% of weeks that miss, theta grinds those to dust and that tail compounds. capping the loss per miss with the spread is what lets a 72% win rate actually compound instead of getting eaten by the misses. whether outright vs spread wins on a given monday depends on iv rank at signal time. low iv rank, the outright is cheap and the spread saves little. high iv rank, the short leg is worth a lot so the spread is clearly better. i pull iv rank and the implied weekly move from thetaedge monday morning to make that call. last and most important: your backtest is on the underlyings return, not the options pnl. that 0.33% avg per trade will not survive bid ask, theta and entry iv once you map it onto actual contracts. before you trust any of this, rerun the backtest on simulated option pnl with realistic fills. plenty of real underlying edges die the moment you put them through an option chain.