Dynamic Hedging

Strategy 3 is a realistic delta-hedging strategy using random walk deltas plus MSFT order book data. At regular intervals, it evaluates net delta and trades a portion to get flat, enforcing a minimum time between hedges. Hedge trades use fill-or-kill limit orders priced from synthetic mid and spread, with a fixed exchange delay before execution.

A synthetic book persists consumed liquidity. We track: Stock position and options delta; Net delta of the combined portfolio; Realized and unrealized P&L from stock trades; Equity and maximum drawdown.

Total Account Value

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Net Delta

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Delta Hedging with MSFT

ModelMean MAEBest Run MAEExecutable Passes
gpt-5.21,369.591,365.425
grok-41,482.331,013.335
gemini-3-pro-preview4,595.521,013.995
gpt-5.1-codex-max10,496.401,370.725
deepseek-v3.214,724.361,127.145
claude-sonnet-4.516,157.31805.165
claude-opus-4.518,945.341,370.722
llama-4-maverick21,279.5220,418.581
nova-premier-v121,345.7521,345.750
llama-3.1-nemotron-ultra21,345.7521,345.750
command-a21,369.5819,852.902
mistral-large-251263,683.241,351.554
qwen3-max329,700.431,087.645