# Earnings Announcement Strategy AI Agent Connect

> A deterministic engine to exploit volatility mispricing around earnings events.

## Overview
- **Category:** finance
- **Price:** Free
- **Endpoint:** https://edge.vinkius.com/vk_preview_C8uk9TCOSsmmqMxJyAv4w0H4tJLjoiKFgdHqnfsE/ai-agent-connect
- **Tags:** options, earnings, volatility, straddle, trading-strategy

## Description

This MCP server provides a deterministic strategy engine that identifies volatility mispricing around earnings announcements. By comparing market-implied expected moves (via straddle prices) against historical realized volatility, it generates precise signals to either sell or buy volatility. Use `analyze_earnings_mispricing` to detect if options are overpricing or underpricing risk, `generate_trade_execution_plan` to obtain specific entry strikes and timing, and `calculate_strategy_performance` to evaluate theoretical outcomes based on actual market moves and IV crush.

## Tools

### analyze_earnings_mispricing
Determines if current options pricing correctly reflects historical volatility patterns

### calculate_strategy_performance
Evaluates the theoretical outcome of the strategy

### generate_trade_execution_plan
Provides specific parameters required to execute the identified strategy

## Prompt Examples

**Prompt:** 
```
Analyze the earnings mispricing for a stock currently at $150 with a straddle price of $5, a historical move of 3%, and an open interest of 500.
```

**Response:** 
```
The expected move is 3.33%. Since this is greater than the historical average move of 3%, the signal is SELL_VOLATILITY. The trade is valid as liquidity requirements are met.
```

**Prompt:** 
```
Generate an execution plan for a BUY_VOLATILITY signal on a stock priced at $200 with a straddle price of $4.
```

**Response:** 
```
The expected move is 2.0%. The entry strikes are $198 and $202, with a total premium of $4.00. The target exit is the earnings announcement open.
```

**Prompt:** 
```
Calculate the performance for a SELL_VOLATILITY trade with a $5 premium, where the actual move was 1% and the IV crush was 30%.
```

**Response:** 
```
The trade resulted in a net profit due to the low actual move and significant IV crush impact.
```

## Frequently Asked Questions

**How does the strategy identify a trade signal?**
The `analyze_earnings_mispricing` tool compares the expected move derived from the straddle price to the historical average move. If the expected move is higher, it signals to sell volatility; if lower, it signals to buy volatility.

**What are the liquidity requirements for a trade?**
A trade is only considered valid if the stock has a market capitalization of at least $500M and the option open interest is greater than 100 contracts.

**When should I exit the position?**
The `generate_trade_execution_plan` tool specifies the target exit time, which is strictly either at the earnings announcement open or the close of the following trading day.