DISCLAIMER: This is a simulated educational exercise using paper trading fake money. This is not investment advice and is not intended to be copied.

TLDR

• Options traded today
  • SELL | -1 STZ 100 | 6 APR 23 | 215 PUT @1.15 LMT
  • SELL | -1 UNH 100 | 6 APR 23 | 477.5 PUT @.68 LMT [TO OPEN]
• Started my foray into this paper trading experiment using AI to pick options and trade in a simulated paper trade on thinkorswim

Today In Review

Welcome to my first day attempting to trade using AI!

First let’s get a few house keeping items out of the way…

Who am I? Definitely not an expert. I am someone who is generally aware of basic personal finance and investment principles. While I do have a small stock portfolio, I almost never trade and have never traded options. To get my feet wet I have decided to give this a go with some paper money to see how well I can do.

What is this blog? This is a way to document my experiences and most importantly log my thought processes for why I made the moves I made. I am keenly interested to read back on this some day and learn how to take my emotions out of my decisions and trust the robots to do their job.

What am I doing? It’s actually quite straightforward

1. Opening a simulated paper trading account on thinkorswim with $100,000.
2. Using this money to trade options, mostly with less than 5 days until expiration to see what I can do with my investment.
3. Using AI that I wrote to focus on writing options to collect premium for contracts unlikely to be executed.
4. Analyzing how efficient I can be with my capital. Writing an option puts a sizable portion of your portfolio on the sideline as collateral. Let’s see how this factors into my decision making

What are my expectations? Primarily learning how much I can achieve with little input. It’s important to note I do have a full time job that is not trading. So I do not have all day to sit and analyze charts or wait for the perfect opening. I get a few minutes of a coffee break here or there and in that time would like to quickly understand how best to make a move with my portfolio. If I can achieve an average 0.5% profit per week I will be ecstatic.

What I Did Today…

Looking at my AI output over coffee this morning I saw two notable trades that I pulled the trigger on. One was for UNH the other was for STZ

UNH

First thing I saw was for one of my AI models, it was showing a score of 0.9918 for the 4/6 PUT contract at a $477.50 strike (UNH was trading at about $490 at this point in time). I first wanted to check if this was part of a trend or just a random contract thrown out there, so I dove into the weekly view:

What I saw was the AI indicating essentially a resistance line around the $470-$480 range over the next few weeks.

Next I wanted to look more broadly as to what my other models were saying. Investigating this I quickly saw that all models were showing a similarly bullish pattern:

Essentially the AI was telling me across 6 different models that there were a lot of put contracts of high probability of expiration as compared to the call contracts, indicating that the stock could be undervalued.

What’s more, I then pulled up a few other technical indicators to double check this suspicion and saw similar bullish patterns

At this point I felt compelled to roll the dice and see what happens. I wrote a put contract for the 4/6 expiration at $477.50, pocketing the $0.68 / share premium

STZ

Next I saw an alert for STZ. I found this one particularly interesting because it has an earnings date scheduled for this week. Stocks tend to be highly volatile around earnings and therefore have a higher risk premium that can be collected.

At this point in the day my coffee break was ending, so I didn’t have time for screen shots. However there was a similar story to UNH, however with less certainty around the long term. I decided to take a risk on this one since the premium seemed arbitrarily high, and I wrote a put contract for the 4/6 expiration at $215, pocketing the $1.15 per share

Portfolio Standings

Portfolio Value (Open)	$100,000.00
Portfolio Value (Close)	$100,186.66
Change (Day)	0.1867%
Change (Tot)	0.1867%
Buying Power (Close)	$88,343.96
Trades Made Today	2

Closing Thoughts

That’s it for today! Will I be able to keep up with this pace every day? Hard to say but stay tuned to find out more!