# Kelly Criterion Bankroll Optimizer AI Agent Connect

> Deterministic position sizing for binary prediction markets using Kelly Criterion math.

## Overview
- **Category:** finance
- **Price:** Free
- **Endpoint:** https://edge.vinkius.com/vk_preview_Zd7AMMhTtCWeNNInBD8hPrVe437r6sz6L02oyUYA/ai-agent-connect
- **Tags:** kelly-criterion, position-sizing, risk-management, betting, prediction-markets

## Description

This MCP server provides a suite of mathematical tools for managing bankrolls in binary prediction markets. It uses the Kelly Criterion to calculate optimal bet sizes based on the edge between market prices and your estimated true probabilities. Users can use `calculate_kelly_position` to find specific bet amounts, `simulate_strategy_performance` to forecast long-term growth and risk of ruin, or `validate_market_edge` to quickly assess if a market opportunity is profitable. All calculations include safety multipliers and a strict 5% position cap to protect capital.

## Tools

### calculate_kelly_position
Calculates the recommended bet size for a single market opportunity

### simulate_strategy_performance
Estimates the long-term behavior and risks of a specific betting strategy

### validate_market_edge
Quickly determines if a market opportunity is worth pursuing

## Prompt Examples

**Prompt:** 
```
I have a $1000 bankroll. The market price for a 'Yes' outcome is 0.4, but I think the true probability is 0.5. What should my bet size be using Half-Kelly?
```

**Response:** 
```
With a $1000 bankroll, a market price of 0.4, and a true probability of 0.5, your recommended bet size using Half-Kelly is $12.50.
```

**Prompt:** 
```
Is there an edge in a market where the price is 0.7 and my estimated probability is 0.6?
```

**Response:** 
```
No, there is no profitable edge in this market because the true probability is lower than the market price.
```

**Prompt:** 
```
Simulate 100 bets with a $500 bankroll, market price 0.5, true probability 0.55, and a 0.25 safety multiplier.
```

**Response:** 
```
The simulation for 100 bets shows an expected growth rate of 0.002 per bet, a risk of ruin of 0.0%, and a maximum drawdown of 1.2%.
```

## Frequently Asked Questions

**How does the position sizing cap work?**
The server enforces a hard 5% cap on any single bet. Even if `calculate_kelly_position` suggests a larger amount, the recommended bet size will never exceed 5% of your current bankroll.

**What is the difference between Full Kelly and Half-Kelly?**
Full Kelly uses the raw mathematical fraction. Half-Kelly uses a `safetyMultiplier` of 0.5, which reduces the bet size to half of the full Kelly amount to decrease volatility and drawdown risk.

**Can I simulate long-term outcomes?**
Yes, you can use `simulate_strategy_performance` to run a simulation of consecutive bets to estimate your expected growth rate and the probability of a 90% drawdown.