# Futures Hedging Strategy AI Agent Connect

> Calculate precise futures contract requirements to neutralize portfolio beta exposure.

## Overview
- **Category:** finance
- **Price:** Free
- **Endpoint:** https://edge.vinkius.com/vk_preview_SLvPM6WmP579Yz7qlPDp4IhlAGBn1Xb5LkHKJRsI/ai-agent-connect
- **Tags:** delta-hedging, futures, portfolio-management, beta-neutral, risk-analysis

## Description

This MCP server provides deterministic delta-hedging capabilities for managing portfolio risk. It allows AI agents to calculate the exact number and direction of futures contracts needed to neutralize beta exposure. Using `calculate_hedge_signal`, agents can determine if they should BUY or SELL contracts based on portfolio value, beta, and market liquidity. The server also includes `evaluate_hedge_performance` to measure hedge effectiveness and tracking error, and `check_rebalance_necessity` to monitor for weekly schedules or significant beta drift.

## Tools

### calculate_hedge_signal
Determines the specific number and direction of futures contracts required to meet the target hedge ratio

### check_rebalance_necessity
Determines if the portfolio requires a new hedge calculation based on time or risk shifts

### evaluate_hedge_performance
Analyzes the success of the current hedge by calculating effectiveness and error

## Prompt Examples

**Prompt:** 
```
Calculate the hedge signal for a long portfolio worth $500,000 with a beta of 1.2, targeting a 1.0 hedge ratio. Futures price is $4,000 with a multiplier of 50 and open interest of 20,000.
```

**Response:** 
```
To hedge your long portfolio, you need to SELL 3 contracts.
```

**Prompt:** 
```
Check if I need to rebalance. Last rebalance was 2024-05-01, today is 2024-05-10, previous beta was 1.0 and current beta is 1.15.
```

**Response:** 
```
Yes, a rebalance is required due to Beta Drift.
```

**Prompt:** 
```
Evaluate my hedge performance. Hedged variance is 0.02, unhedged variance is 0.05, I used 5 contracts and margin per contract is $2,000.
```

**Response:** 
```
The hedge effectiveness is 0.6 and the total margin requirement is $10,000.
```

## Frequently Asked Questions

**How do I know if my hedge is effective?**
You can use the `evaluate_hedge_performance` tool to calculate hedge effectiveness, which compares the variance of the hedged portfolio against the unhedged one.

**When should I rebalance my hedge?**
A rebalance is triggered if seven days have passed since the last update or if the portfolio beta changes by more than 0.1, as determined by `check_rebalance_necessity`.

**What are the liquidity requirements for hedging?**
The `calculate_hedge_signal` tool enforces filters: the portfolio must be over $100,000, futures open interest must be at least 10,000, and the contract notional must exceed $10,000.