# Resolution Date Proximity Fade AI Agent Connect

> A deterministic mean-reversion strategy for exploiting liquidity premiums near market resolution.

## Overview
- **Category:** finance
- **Price:** Free
- **Endpoint:** https://edge.vinkius.com/vk_preview_twhFNQq6DGU4FNzRZucOFHFbbg4LdGPNlHq5Ssb5/ai-agent-connect
- **Tags:** mean-reversion, liquidity, trading-strategy, prediction-markets, risk-management

## Description

This MCP server provides specialized tools to identify mean-reversion opportunities in prediction markets. By analyzing the proximity to market resolution, price extremity, and liquidity constraints, it detects when prices have deviated significantly from fair value due to drying liquidity. Use `calculate_fade_signal` to identify contrarian trades, `estimate_reversion_metrics` to project financial outcomes, and `validate_exit_window` to ensure trades are exited safely before the final settlement to avoid resolution risk.

## Tools

### calculate_fade_signal
Determines if a trade signal is generated based on proximity to resolution, price extremity, and liquidity constraints

### estimate_reversion_metrics
Calculates the expected financial outcomes of a potential fade trade

### validate_exit_window
Ensures that the proposed holding period does not violate the safety constraint regarding resolution proximity

## Prompt Examples

**Prompt:** 
```
Is there a fade opportunity for a market resolving in 30 hours with a Yes price of 0.97 and a spread of 0.15?
```

**Response:** 
```
Yes, a FADE signal is generated. You should BUY_NO at the current price to target a mean-reversion bounce.
```

**Prompt:** 
```
Check if holding a trade for 20 hours is safe if the market resolves in 30 hours.
```

**Response:** 
```
No, the trade is not safe. You must exit at least 12 hours before resolution, leaving only an 8-hour window.
```

**Prompt:** 
```
Calculate the expected return for a trade with an entry price of 0.95, an expected bounce of 0.05, and a spread of 0.12.
```

**Response:** 
```
The expected return is 0.05 minus the exit cost derived from the 0.12 spread.
```

## Frequently Asked Questions

**What is a fade signal?**
A fade signal is a contrarian trade recommendation generated when market prices reach extreme levels (below 0.05 or above 0.95) and liquidity is low near the resolution time.

**How does the strategy handle resolution risk?**
The strategy uses `validate_exit_window` to ensure that any proposed trade is exited at least 12 hours before the market settles, preventing exposure to sudden settlement outcomes.

**Can I use this with Claude Desktop?**
Yes, you can connect this MCP server to Claude Desktop, Cursor, VS Code, and any other MCP-compatible client via Vinkius Edge.