I decided to take the plunge and let AI run my first put credit spread. It looked at a few options from the latest report and I picked EFA.
The AI “suggestion” was to buy the $85 Put and sell the $92 put for a max profit of 6% on the trade on EFA. I have EFA marked at fair value at $93.02 so buying it at $92 would be a nice discount. Unfortunately, the market moves quickly so I modified it slightly and bought the $86 put and sold the $93 put to collect $67 (hey this is an experiment after all). Margin requirement is $8600.
Of course I could easily have sold 10 contracts to score $670 instead of $67 but I need to test AI’s ability before I start doing that with confidence. Margin requirement on 10 contracts would be $86,000.
I will write a follow up post on June 18th to see where this trade landed. This also happens to be the timeline that AI predicted a potential correction in the market so if that does come to fruition I am already positioned to automatically buy this ETF at a steep discount. I don’t mind it falling further down after I buy at $85, I’ll likely pick up more or execute more put credit spreads.
As always, don’t copy my trades and do your own due diligence and seek investment advice if you don’t know what you’re doing. No one reading this post knows my time horizon, risk tolerance, capital requirements, or anything else so you really shouldn’t be copying trades you don’t understand.
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Is AI giving you investment advice yet?