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An AI pre-trade check before you sell an option

Before you sell a put or a call, ask six questions: earnings, ex-dividend, news, liquidity, size and exit plan. An AI can walk you through them in a few minutes. But every answer about a date or a price gets checked at the source.

Options guide · 9-minute read · Updated 2026-10-28

The short answer

Most bad option sales aren't bad picks. They're missed checks: an earnings report inside the trade, a dividend that triggers early Assignment, a strike nobody trades, a position that's too big.

A six-question check catches most of these. An AI is a good partner for it. It asks the questions in order, explains why each one matters and does the math. It is a bad source for the facts themselves. Dates and prices can be stale or made up. So the rule is simple: the AI asks, you look it up.

This check fits every sale in the wheel strategy, and it's one part of my guide to AI for options trading.

Start the check

Paste this first. It sets the rules for the whole chat.

I'm about to sell an option. Run a pre-trade check with me, one question at a time. Six topics: earnings date, ex-dividend date, recent news, liquidity, position size, exit plan. For any date or price, don't tell me the answer from memory. Tell me where to look it up, then wait for me to paste what I found. At the end, list each topic as pass, fail or unclear.

Then give it the trade: stock, put or call, strike, expiry, and the bid on your broker.

The six questions

1. Is there an earnings report before expiry?

My option expires [date]. I found the next earnings date is [date] on [source]. Is it before expiry? If yes, explain in plain words what an earnings gap could do to this trade, using my strike.

Verify at: the company's investor relations page, or the earnings calendar in your broker. An Earnings report can move a stock hard overnight. That's why premiums swell before one. See checking the earnings date before selling.

2. Is there an ex-dividend date before expiry?

I'm selling a [call/put] at $[strike], expiring [date]. The next ex-dividend date is [date] and the dividend is $[amount] per share, from [source]. Does this raise the chance of early assignment? Explain why in 3 sentences.

Verify at: the company's dividend page or your broker's stock page. This matters most for covered calls that are in the money before the Ex-dividend date.

3. What's the news?

Here are the last week's headlines on [stock], pasted from [source]: [paste]. Summarise what happened in 3 bullet points. Is any of it a one-time event, like a lawsuit, a deal, or a guidance cut? Don't predict the price.

Verify at: the headlines themselves. Paste them in rather than asking the AI to find news. Then you know what it's reading.

4. Can I get filled at a fair price?

The [strike] [put/call] shows bid $[bid], ask $[ask], open interest [OI], volume today [vol]. In plain words, is this easy to trade? How much does the gap between bid and ask cost me on one contract?

Verify at: your broker's live chain. A wide gap between Bid and ask and low Open interest mean you may give up a big slice of the premium just getting in and out. See checking option liquidity.

5. Does it fit my size rule?

My account is $[amount]. My rule: no single position over [x]% of the account. This trade ties up $[strike × 100]. Does it pass? If I'm assigned and the stock falls 25% more, what is the loss in dollars and as a share of my account?

Verify at: your own rule and your broker's buying power screen. The AI does the division. The rule is yours.

6. What's my exit plan?

Help me write my exit plan as three rules: (1) when I'll buy the option back early to take a gain, (2) what I'll do if the stock goes against me before expiry, (3) what I'll do if I'm assigned. Ask me questions until each rule is a clear number or date.

Verify at: nothing to look up. But write the answers in your journal before you place the order.

A worked example (an illustration, not a trade idea)

A made-up stock, XYZ, trades at $60. You plan to sell one 35-day $55 put. Your broker shows a bid of $1.20, so you'd collect $120 and set aside $5,500. Your account is $25,000, and your rule is no position over 25%.

You run the check. Here's how it goes:

Notice row 1. The AI gave a date from memory, even though you asked it not to. That's exactly why every date gets checked. The earnings report sits inside your trade.

Here's what that one fail can cost, if you'd sold the put anyway:

The fix is easy. Choose an expiry that ends before the report, or wait until after it. The check took a few minutes. Skipping it could have cost $1,180.

Make the check a habit

• Save the starter prompt in a note. Paste it before every sale.
• Keep the six answers in your trade journal, next to the trade.
• Treat "unclear" as a fail. If you can't find the earnings date, you don't sell.
• Run the math in a tool too. The cash-secured put calculator and covered call calculator check the AI's arithmetic.
• Read the chain yourself. If you hand the AI a screenshot, read can ChatGPT read an options chain? first.

For how this fits into a whole cycle, see how to use AI for the wheel strategy.

In Canada, cash-secured puts in a TFSA or RRSP depend on the broker, and options permissions differ by broker. Add "Is this allowed in my account type?" to question 5 if you trade there. See brokers that allow cash-secured puts in a TFSA.

Questions