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

Modelpass@3pass@1Mean MAE (solved)Best run MAEAvg. attempts
grok-41.001.001,482.331,013.331.00
claude-sonnet-4.51.001.0016,157.31805.161.00
qwen3-max1.001.00329,700.431,087.641.00
gemini-3-pro-preview1.000.801,245.481,013.991.20
gpt-5.1-codex-max1.000.808,326.531,370.721.20
deepseek-v3.21.000.6012,075.801,127.141.40
mistral-large-25120.800.40137,773.851,351.552.00
claude-opus-4.50.400.408,143.481,370.721.00
command-a0.400.2021,488.7019,852.901.50
llama-4-maverick0.200.0020,418.5820,418.582.00
nova-premier-v10.000.00
llama-3.1-nemotron-ultra0.000.00