AutoOverlay AI: Autonomous Options Yield Agent

Overview AutoOverlay AI is an autonomous options-income overlay agent built for the Alpaca AI Trading Agents Hackathon. Managing a $100,000 USD Alpaca Paper Trading portfolio, it monetizes idle equity via automated Covered Calls and Cash-Secured Puts while rigorously hedging tail-risk. Key Innovations 1. 6-Persona Investment Council: Evaluates every candidate before capital deployment. Personas like Benjamin Graham (enforcing Ch. 14 defensive rules & Ch. 20 Margin of Safety), Warren Buffett, and Ray Dalio debate trade sentiment and log full reasoning traces. 2. Monte Carlo Merton Jump Risk Engine: Stress-tests 1,000 multi-day portfolio paths under non-Gaussian shock jumps (lambda=0.05, jump_mu=-5%) to measure 95% Value-at-Risk (VaR) and Sortino downside ratios. 3. Zero-Slippage Execution & Kill-Switch: Eliminates the 3-10% premium drag of market orders via strict OCC option contract resolution and mid-price limit orders ((Bid+Ask)/2). Includes a Layer 1 Pre-Trade Kill-Switch (>5% drawdown or 3 consecutive stop-losses). Architecture & Team - Quant & AI Layer (Zacky - AI Lead): Monte Carlo jump diffusion, multi-agent council logic, OCC resolver, and risk mitigation. - Backend & Bot Integration (Aji): High-throughput FastAPI services, Alpaca API event loops, and cloud bot deployment. - Frontend & Infrastructure (Aditya): Next.js App Router telemetry dashboard, real-time committee UI, and dedicated VPS hosting. Result Tested on live $100k Alpaca paper capital, AutoOverlay AI successfully filtered illiquid contracts, debated optimal strikes, and executed hedged limit orders—yielding steady overlay income with zero slippage and robust capital preservation.