$2.7k win on a small-cap using AI + options flow
Preface: Mods removed the post yesterday but had tons of dms about this post so reposting with clarifications that led to removal.
I have some experience developing games. Although it's largely irrelevant since game dev is mostly in rust and this alert was written in python by the AI.
I am not affiliated with Xynth whatsoever. I just thought sharing some insight on how I as a 9-5 retail worker use AI to make money would be pretty insightful for the community.
The contents of this post is not AI generated. I wrote it myself. The post has to do with using ai to help setup systems to help you trade.
So I've been messing around on this platform that lets you build your own alerts by writing English prompts to it, which the AI turns into code. I don’t have much experience developing finance software. Every-time i tried coding up something, it would be way too expensive for the data sources I wanted o take far too long. On top of this, watching charts all day was just not feasible for me. Figured I'd bite and build myself a scanner.
The alert was pretty simple: every 5 minutes during market hours, it scanned small/mid-cap stocks for unusual call option activity. Specifically, it looked for cases where call volume was spiking and open interest was building at the same strike, which can sometimes suggest aggressive accumulation.
Again nothing crazy, I’ve been trading these setups for years and so have others on this sub. The bigger unlock was having it run automatically every 5 minutes during trading days, so I don't have to scroll through 8,000 tickers myself.
Timeline
April 24: I got pinged on a name I'd literally never heard of; ESPR (Esperion Therapeutics). Small-cap pharma, ~$650M market cap, trading at $1.83.
Immediately sussed out because biotech micro-caps are exactly the kind of thing that pumps and dumps you in a week.
To dive deeper, i further to tell me "Why did this alert fire? After looking over the alert data and pulling from a couple of other data sources (cheddar flow, fmp, tradingview).
It came back with:
- 1300 contracts were traded in a single cluster of 9 trades
- All betting on $2 strike calls with 05/15 exp
- 100 percent of the volume on this ticker was bullish
- Volume / oil ratio was 1.43 so this had been a long accumulation
- No news or catalysts coming up which signaled that they knew something we didn’t
So at this point the contracts were 0.19 each so I said why not. I bought 30 of them totalling $570. A medium sized position.
May 1st, 3:00 am ET: News breaks out that ESPR is getting acquired by ARCHIMED for $1.1 billion dollars at 3.38 dollars per share. For reference at the time of purchase the stock was at $1.15.
May 1st, 9:30 am ET: ESPR gaps up $1.15 -> 3.38 , my options contract gap up to $1.10 form 0.19. I sell my entire position and come out with: Net +$2,730.
I know one win doesn't make a concrete, backtested strategy. I think for me though, its less about using ai to tell me what to trade but instead using it as a tool to help me setup an ecosystem that helps me stay profitable or become more profitable easier. . Before, my workflow was staring at CheddarFlow on my WFH days, hunting for these filters manually. Now it's all automated.
That said, I still try to exercise as much caution as possible. So with these alerts, I'll get a notification and then message Xynth to deep-research why the alert fired, and it'll either confirm or deny the confluence before I pull the trigger. I never trade it on first notice.
Excited to see what other plays I can catch in the future.
