How to Trade Options with AI: A Beginner's Guide

The Setup

Most people jump into options trading by picking a stock they like and buying a call or put. This guide shows a more systematic approach: use AI to screen hundreds of stocks, narrow down with technicals and news, then analyze the options chain to find the best setup.

What the AI Found

1. 1.Screens 500+ stocks using the built-in Stock Screener with filters for market cap, IV rank, momentum, and liquidity. Returns the top 10 candidates ranked by options trading potential.
2. 2.Pulls RSI, SMA, and volume data for all 10 candidates and plots technical charts. Uses the data to narrow down to the top 2-3 stocks with the cleanest setups.
3. 3.Analyzes recent news and catalysts for the top picks. Checks for earnings dates, FDA approvals, macro events, or anything that could move the stock in the near term.
4. 4.Dives into the options chain for the #1 pick. Analyzes OI, volume, put/call ratio, and IV by strike to identify 3-4 potential trade setups with full P&L diagrams.

The Trade

The final output is 3-4 specific trade setups on the best candidate, each with strike, expiration, entry price, target, stop loss, max profit, max loss, and a P&L diagram.

The Result

This isn't about one trade result — it's a repeatable workflow. Run it weekly to find fresh setups. The AI handles the data processing and screening, you make the final call on which trade to take.

The Prompt

Find me stocks where the price is already going up (positive 1-month momentum) but options are still cheap (IV rank under 30). Filter for market cap over $1B and options volume over 1,000 contracts/day. Rank the top 10 by cheapest options + strongest momentum. Table and scatter chart.

For those top 10, check institutional options flow — who's placing $50K+ bets, how many are calls vs puts, how many are sweeps. Narrow to the top 3 where big money agrees with the stock's direction. Table and bar chart.

For those 3 finalists, pull the actual options chains — calls, nearest monthly expiry, strikes within 10% of current price — and show me open interest by expiration. I want to see where the liquidity sits and which strikes are tradeable.

For each finalist, design the best-fitting trade and show me a P&L diagram. Pick the right structure — short put for income, bull call spread for defined risk, long call for conviction. Show max profit, max loss, breakeven, and capital required on each chart.