The new ETF from Optimize is a long only, actively managed fund focused on upcoming event opportunities.

The Optimize AI Smart Sentiment Event-Driven ETF (NYSEARCA: OAIE) from Optimize Advisors uses a proprietary Options Artificial Intelligence “Smart Sentiment” technology to selects its investments. This rigorous, systematic process is at the core of the actively managed, long-only fund. (ETF Trends – VettaFi)

Using AI to capture sentiment data from options

Upcoming event opportunities are derived from a population of 10-to 30 large-cap constituents that have weekly options. The “Smart Sentiment” technology distills “investment wisdom hidden within the options markets.”

Smart Sentiment Metrics use the prices of the weekly and other options available on a security to assess the overall market’s expectations for the possible price movements of the underlying security. These metrics provide insights into market participants’ detailed risk and reward expectations by capturing the views of “silent” investors.

Optimize Advisors extracts Smart Sentiment Metrics for stocks with upcoming events (primarily earnings calls). These Smart Sentiment stock buying opportunities are ranked by risk/reward. OAIE then buys the most attractive stocks in this ranked list. This process aims to achieve high precision and reduce prediction errors.

Smart Sentiment is different from Social Sentiment

Smart Sentiment analyzes actual trades that capture the opinions of influential options investors, unlike social sentiment methods that follow unfiltered media commentary. Options market aggregates information from both institutional and retail investors, including “silent” investors who would not post in social media.

Furthermore, the options market influences equity behavior. Because market makers hedge options, options trades can lead to price moves in the equity markets.

Optimize Advisors generates key Smart Sentiment price probability and risk metrics from the underlying options quote data, using its proprietary Options AI platform. These metrics signal options-implied risk or opportunity levels that allow the creation of equity momentum strategies that may have an advantage over lagging momentum indicators.

“By drawing upon decades of options trading and AI experience, we have developed a smart sentiment and event-driven methodology focused on long-term capital appreciation that we believe can complement client portfolios,” said Optimize Advisors CEO Gideon Agar.

The ETF has an expense ratio of 1%.

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