I asked ChatGPT how to profit from the impending AI stock crash. Oh, the irony.

Jun 12, 2024

I’ve stated in my previous post that prices for AI stocks (Nvidia, ARM, and the likes) are bound to fall. So how can I profit from my brave prediction?

I know of 2 basic choices - short selling and put options. But I’m wondering whether there are alternatives, so I ask the best financial advisor in the world - ChatGPT.

The all-knowing entity starts with the 2 strategies I already mentioned. For the short position, it encourages me to use a stop loss, which makes sense.

It then offers three more that I wasn’t aware of:

  1. Bear put spreads, which is when you buy a put at a lower strike price and you sell another at a higher price; both on the same stock and the same expiration date.
  2. Inverse Exchange Traded Funds (ETFs), which are ETFs designed to move in the opposite direction of the underlying asset.
  3. Contracts for Difference (CFDs); financial derivatives that follow the valuation of the underlying stock price and, unlike options, are cash-settled.

I have to say, I’m genuinely impressed. These were trading ideas that never came across my mind, and they seem right. Well, in the next post I’ll be opening a brokerage account and checking how accurate this information truly is.

Disclaimer: Whatever I'm writing here isn't financial advice.

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