Problem: closing a covered call at +50% is satisfying, and the urge to sell another one immediately is real. Fix: five conditions where the rules say WAIT, run as a single AI discipline prompt against your own position. Payoff: you stop capping the stock for a few hundred quid right before it runs.
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Trade #6 on BMNR closed on 13 May for +$375 in nine days. The 50% profit rule and the 21-DTE rule were both satisfied — sold for $2.25, bought back at $1.00 with three weeks still on the clock. The brokerage app pings. The position is flat. ETH is moving. The chain is right there.
The instinct is to sell another call immediately. The premium felt good, the win was clean, and the same strike is sitting on the same chain at roughly the same delta. Why wouldn’t you?
Because the rules say not to. AI covered call re-entry comes down to five rules, six trades, one persistent lesson — selling another call isn’t the default.
Should you sell another covered call immediately after closing one? Usually not. The re-entry check runs five conditions — stock position relative to basis, catalyst window, reason the last trade closed, current IV versus the median, and whether a clean close signals a pause rather than a repeat — before the chain is even opened. All five can say WAIT even when the premium looks fine.
Why the urge is the problem
Premium income is addictive in a specific way: every closed cycle reinforces the impulse to redeploy. Nine days, +$375, repeat. That maths is what makes the wheel work, but it’s also what gets retail sellers into trouble.
The bad trades aren't the ones where the rules say sell and it goes sideways. They're the ones where the rules say wait and you sold anyway, because the alert was loud and the chain was open.
I run the same AI prompt every time I close a position now. Not because the AI knows anything I don’t — it can’t see the live chain, and any prompt that pretends otherwise produces fiction. It’s because the prompt forces me to answer five specific questions before I open the chain, in the same order, every time — the Prompt Stack structure: ROLE, FILTER, RISK, VERDICT. The default urge wants to skip straight to the strike grid. The prompt makes me stop.
ROLE: Act as a covered-call discipline coach, not a strike picker. You are not recommending strikes, premiums, or contracts. You are checking whether the rules say WAIT or SELL on a re-entry decision I’m about to make.
FILTER: My position is [TICKER]. Last closed trade: [STRIKE, PREMIUM RECEIVED, PREMIUM BOUGHT BACK, DAYS HELD]. Today’s setup:
- Current price: [PRICE]
- Cost basis: [BASIS]
- 30-day IV: [VALUE]% (current)
- Median IV last 90 days: [VALUE]%
- Days to next earnings or catalyst: [N]
- Recent move: [e.g. up 4% over five sessions / flat / down 7%]
- Reason last trade closed: [PROFIT RULE HIT / 21-DTE / STOCK FELL]
RISK: For each of these five conditions, tell me whether the rule says WAIT or SELL. State the loudest signal first.
- Is the stock within 5% of my cost basis after a fall, with room to rebound before being capped?
- Is there a known catalyst inside 14 days that could spike the price?
- Did the last trade close because the stock fell, not because the call decayed worthless?
- Is current IV below the median for this stock over the last 90 days?
- Did the last trade close inside the 50% rule and 21-DTE window with clean discipline, suggesting I should wait for a fresh setup rather than chase the same one?
VERDICT: One sentence — WAIT or SELL — naming the loudest of the five signals. If WAIT, state the single condition that would have to change to flip the answer.
Five conditions where the rules say WAIT
These map one-to-one to the five trading rules I run on BMNR. Each is a reason the prompt above will return WAIT, even when the chain looks fine.
1. The stock is below your basis after a fall
Trade #5 closed in April for a thin +$18 — BMNR ran toward the $23 strike and I closed tight. By that point I’d already averaged down through March, pulling my effective basis to $18.99. Gross basis sat at $22.11. Selling another $23 call into a stock that had spent three months grinding sideways would have capped the rebound right before the position climbed back. Rule 5: no immediate re-entry into compressed conditions. The watch table waits for BMNR to rally toward $22.50–$23.00 before the next entry is even considered.
2. There’s a catalyst inside 14 days
If something inside the next 14 days could spike the stock — an ETH treasury announcement, a listing event, an earnings print on a comparable name — you’d be selling premium into the calm right before the move. The premium looks fair on a flat tape and bad on a moving one. BMNR uplisted to the full NYSE on 9 April this year. Selling calls into that window was not the trade.
3. The last close happened because the stock fell, not because the call decayed
If your last cycle closed because the underlying dropped and the call decayed mechanically, you are looking at a falling stock and a chain that prices in lower premium. The temptation is to sell again immediately because the strike now looks “safer”. It isn’t — you’re selling into compressed IV on a position that hasn’t proved it’s stable. After Trade #5’s thin +$18 close, BMNR softened through the following weeks; writing another contract into that tape would have been the textbook version of this mistake. Rule 4 says sell on green days or IV spikes, not on the wreckage of a drop.
4. IV is below the median for this stock
Rule 4 is the volatility version of the same discipline. BMNR’s typical IV sits around 85% — the stock moves with ETH, and the chain is priced accordingly. When IV compresses below its own median, the premium doesn’t compensate for the assignment risk. The prompt forces you to look up the comparison rather than take the strike grid at face value. It’s the one check most easily skipped, because IV Rank takes one extra lookup.
5. You just closed a clean trade — wait for the next fresh setup
Rule 1 (50% profit target) and Rule 2 (21-DTE exit) close positions while time decay still favours you. The payoff comes from waiting for the next clean setup, not redeploying on the same one — when both rules trigger together, that’s the signal to flatten and wait. Trade #6 closed at 23 DTE with both rules satisfied. The right next move was to watch, not write another contract because the alert was still flashing.
What you do once you’ve decided to wait
Once the prompt returns WAIT, the discipline becomes a watch rather than a one-shot decision. My re-entry table lists the specific conditions that would flip the answer — price trigger (BMNR rally toward $22.50–$23.00), IV trigger (a spike in IV Rank), target cycle (July monthly), strike target (~30 delta, roughly $26–$27 depending on IV at entry).
Re-run the prompt weekly with updated inputs. The verdict flips from WAIT to SELL when the conditions earn it, not when the alert pings. The prompt isn’t doing the analysis — it’s enforcing the order in which you check.
Where these five conditions fall short
The five conditions are necessary, not sufficient. They hold you back from selling another call when you shouldn’t — they don’t find you the next trade. The prompt assumes the position is one I still want to be selling calls on at all (the check for whether a name is even a covered-call candidate is Prompt 1 of the entry-side post) and it assumes honest inputs — IV pulled from your broker or a tool like Barchart, a catalyst calendar you’ve checked, a basis number that includes commissions. Garbage in, confident WAIT out.
The deepest limit is what every prompt on this site repeats: the AI cannot see the live chain. It is not picking strikes, not estimating premiums, not modelling assignment probability. It is auditing the discipline (the failure modes when you ask it to do more are documented in AI for options trading: what it gets wrong). Give it numbers, it returns a structured answer. Give it a question with no numbers, it returns plausible-sounding fiction.
Garbage in, confident WAIT out.
Verdict
What worked
Five rules, mapped to five questions, run as a single AI prompt before every re-entry decision. Trade #6 closed at +$375 in nine days with both rules followed; the prompt then said WAIT — and BMNR has stayed below the re-entry trigger since.
What didn't
The prompt won't find you the next trade — and WAIT verdicts have a real cost if the stock then runs anyway. The discipline guards against the impulse trade, not against tight parameters.
Confidence
Medium — six closed trades is enough to know the discipline holds; not enough to claim a statistical edge over the impulse trade I'd otherwise make.
What would change my mind: if the WAIT verdicts started looking like obvious misses three or four cycles in a row — strike comfortably above the closing price, IV compressed but stable, no catalysts inside the window, and the stock still ran. That would mean the rules are too tight for this name’s behaviour, and the parameters need recalibrating. Six trades in, the verdicts have held.
The default urge after a close is to sell another call. The prompt is what makes the default deliberate instead of automatic.
Ben documents AI experiments against his own investment portfolio — real money, human analysis, sceptical use. About Ben →