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Calculate Kelly Sizing

calculate_kelly
Read-only

Compute Kelly criterion optimal position sizing for an option trade. Uses BSM expected value vs premium to find edge-maximizing bet size.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
muYesExpected annual return of underlying as decimal (0.10 = 10%)
dteYesDays to expiration
spotYesCurrent stock price
typeYes'call' or 'put'
sigmaYesImplied volatility as decimal (0.20 = 20%)
apiKeyNoFlashAlpha API key. Omit when calling via /mcp-oauth (OAuth flow); required on /mcp.
strikeYesStrike price
premiumYesOption premium paid

TDQS

A4.1/5.0
Behavior4/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations provide readOnlyHint, so the description adds value by explaining the computational approach (BSM expected value vs premium) and the concept of edge-maximizing bet size. This goes beyond the annotation and gives insight into how the tool behaves without contradicting the read-only hint.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness5/5

Is the description appropriately sized, front-loaded, and free of redundancy?

Two sentences, about 25 words, with the purpose front-loaded in the first sentence and the method in the second. Every word earns its place with no fluff or repetition.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness3/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

The description explains what the tool does and its method, but does not specify the output format (e.g., whether the result is a fraction of capital) or any assumptions/caveats. With no output schema, this is a notable gap for a parameter-heavy calculation tool.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters3/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema description coverage is 100%, so the schema already documents all 8 parameters. The description does not add parameter-level meaning beyond mentioning 'premium' and 'expected value' conceptually. Baseline 3 is appropriate as the schema fully covers parameter semantics.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly states the tool computes Kelly criterion optimal position sizing for option trades, using a specific verb 'compute' and resource. It distinguishes itself from sibling tools like calculate_greeks and solve_iv by focusing on Kelly sizing and BSM expected value vs premium.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines4/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description gives clear context that the tool is for option trades and uses BSM expected value vs premium to find edge-maximizing bet size. It implies when to use it (when sizing option positions) but does not explicitly mention alternatives or exclusions compared to sibling tools, so it misses the top score.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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TDQS

A3.6/5.0
Disambiguation2/5

Many tools have overlapping scopes: get_stock_summary, get_volatility, get_vrp, and get_exposure_summary all return comprehensive analytics with shared metrics, making it hard to pick the right one. The flow family (get_flow_live, get_flow_summary, get_flow_scan, get_flow_signals, etc.) has significant redundancy — get_flow_live bundles data also available via separate tools.

Naming Consistency4/5

Tool names mostly follow a consistent get_<noun> pattern, with clear subgroups like get_historical_* and get_*_exposure. Minor deviations exist: post_screener, post_structure_pnl, calculate_greeks, and solve_iv break the get_ convention, but they are still predictable and readable.

Tool Count1/5

With 73 tools, this is far beyond the 3–15 tool sweet spot and even the 50+ extreme mismatch threshold. While the domain is broad, the enormous surface is bloated by near-duplicate historical replay variants (18 get_historical_* tools) and multiple overlapping summary endpoints, making it unwieldy for an agent.

Completeness5/5

The tool set provides thorough coverage of options analytics: quotes, chains, greeks, volatility surface, VRP, exposure, flow, historical replay, screening, and strategy analysis. There are no obvious dead ends — core workflows like calculating greeks, getting exposure, and screening the universe are all supported.

Resources