New York-based Optimize Advisors has launched its debut ETF, an actively managed US equity fund that utilizes artificial intelligence to identify stocks with positive share price sentiment ahead of a significant corporate event.

The ETF’s security selection is guided by insights from options trading markets.

The Optimize AI Smart Sentiment Event-Driven ETF (OAIE US) has been listed on NYSE Arca with an expense ratio of 1.00%.

The fund’s investment process begins by screening a universe of US-listed stocks for those with liquid options markets and upcoming corporate events such as earnings calls, product announcements, mergers and acquisitions, regulatory announcements, and industry and sector-specific news.

Drawing upon a decade of options trading and AI experience, Optimize analyses these stocks’ option contracts to assess the overall market’s expectations for future movements in the firms’ share prices.

According to Optimize, metrics related to options trading offer valuable insights into risk and reward expectations by capturing the views of ‘silent’ investors, both institutional and retail, who do not wish to publicly announce their sentiment.

The ETF selects between 20 and 40 stocks with the highest sentiment indicators. The portfolio consists of the actual underlying stocks; no options contracts are purchased.

The fund will also invest in ETFs providing exposure to broad-based equity indices or specific sectors of the US stock market. This is done to reduce the fund’s concentration risk as well as maintain sufficient beta exposure between earnings seasons.