With $100 and a dare to see what AI can do, a Reddit user turned ChatGPT into a micro-cap day trader and in its first month, the bot beat two small-cap benchmarks by a wide margin.
What Happened: Nathan Smith, who documents the project on Reddit and GitHub, fed OpenAI's GPT-4o daily portfolio data, enforced strict stop-loss rules, and limited picks to U.S. micro-caps under $300 million.
After four weeks, his account was up roughly 24-25%, outpacing the Russell 2000 and the SPDR S&P Biotech ETF (XBI), which each rose about 3-4% over the same span, according to his charts.
Smith describes the effort as a six-month ‘live experiment’ to test whether a language model can find alpha in thinly covered names with only a $100 stake. The setup is simple but structured. The model proposes buys and sells weekly, Smith executes the trades and posts the logs and a Python script tracks performance versus benchmarks. He credits the guardrails, which include position limits, manual execution and automatic stop-losses, for keeping the system disciplined.
The early math is what turned heads. Smith's chart shows GPT-4o's equity curve sprinting ahead while small-cap gauges lag. He also reports risk metrics such as Sharpe and Sortino to address the critique of just simply taking more risk, which was a common sentiment in the comments.
A report by Decrypt pegs Smith’s four-week return at 23.8%, versus gains of roughly 3.9% for the Russell 2000 and 3.5% for XBI. For context, the broader S&P 500 climbed only a few percent in that window.
Why It Matters: The experiment had some caveats. For starters, the process has only run for a month, and the bot has leaned into volatile biotech names, a sector where 20% daily swings are not rare. However, even Smith tells readers this is an experiment and not financial advice.
Researchers have tried AI stock-picking before with mixed results. A German team reported in Finance Research Letters that advanced OpenAI models picked profitable stocks, while University of Florida's Alejandro Lopez-Lira told Morningstar that long-run simulations show ChatGPT underperforms with realistic capital.
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