# Time Decay Theta Harvesting AI Agent Connect

> Predict and harvest binary option time decay using deterministic modeling.

## Overview
- **Category:** finance
- **Price:** Free
- **Endpoint:** https://edge.vinkius.com/vk_preview_lpqdBxMp6XdXGiYeKxYbKzHcs9rcgDotDpGzOaCn/ai-agent-connect
- **Tags:** binary-options, theta, quantitative-finance, trading-strategy, predictive-modeling

## Description

This MCP server provides a deterministic modeling engine for predicting and harvesting the time decay (theta) of binary options. By analyzing the relationship between market prices and theoretical convergence, users can identify strategic entry and exit points for 'No' share positions. The server includes tools to `analyze_decay_curve` for price path prediction, `evaluate_strategy_signals` to identify BUY, HOLD, or EXIT opportunities, and `calculate_performance_metrics` to measure annualized yield and trade efficiency.

## Tools

### analyze_decay_curve
Generates the theoretical price path of a binary option over its remaining lifespan

### evaluate_strategy_signals
Identifies entry and exit opportunities based on the relationship between market price and the theoretical decay curve

### calculate_performance_metrics
Computes the efficiency and profitability of a completed or ongoing trade

## Prompt Examples

**Prompt:** 
```
Generate a decay curve for a binary option with a market Yes price of 0.45, 120 days to resolution, 20% volatility, and a 3% risk-free rate.
```

**Response:** 
```
The theoretical price starts at 0.45 and follows a deterministic path toward 0.00 over the next 120 days, with the daily theta increasing as the expiration approaches.
```

**Prompt:** 
```
The current price of 'No' shares is 0.12 and there are 100 days left. Should I buy?
```

**Response:** 
```
BUY. The price is below the 0.15 threshold and there are more than 90 days remaining until resolution.
```

**Prompt:** 
```
I bought 'No' shares at 0.10, the current price is 0.15, and I held them for 30 days with 1000 initial capital. What is my performance?
```

**Response:** 
```
The absolute return is 0.05 per unit, and the annualized yield is 60.95%.
```

## Frequently Asked Questions

**What is theta harvesting?**
Theta harvesting is a strategy where traders buy 'No' positions in binary options when the price is low, profiting as the passage of time forces the price toward zero.

**How do I know when to exit a position?**
You can use the `evaluate_strategy_signals` tool, which triggers an EXIT signal if the market price deviates by more than 2 standard deviations from the predicted decay curve.

**What inputs are required for the decay curve?**
To use `analyze_decay_curve`, you need the current market 'Yes' price, days remaining until resolution, annualized historical volatility, and the risk-free rate.