Risk Disclosure
Last updated: March 27, 2026
Important: Read Before Using the Market Signal Dashboard
The Market Signal Dashboard is an educational demonstration tool built by a software developer. It is not an investment advisory service. The creator is not a registered investment advisor, broker-dealer, or financial professional.
Options Trading Risk
Options trading involves substantial risk of loss and is not appropriate for all investors. Before trading options, you should:
- Understand that you can lose 100% of your investment (the entire premium paid)
- Be aware that options expire worthless more often than not
- Consult with a qualified, licensed financial advisor
- Only risk money you can afford to lose completely
- Read the Characteristics and Risks of Standardized Options (OCC disclosure document)
Hypothetical Results
All signals, option plays, backtest statistics, win rates, Sharpe ratios, and equity curves displayed on this site are hypothetical. They:
- Are based on backtested data (1998–present, 226 monthly signals)
- Do not reflect actual trades executed with real money
- Do not account for slippage, partial fills, or real market impact
- Use estimated transaction costs (4% per trade) that may differ from actual costs
- Were prepared with the benefit of hindsight
- May exhibit survivorship bias or other statistical artifacts
Past performance — whether actual or hypothetical — does not guarantee future results.
How the System Works
Data Sources
| Source | Data | Freshness | Type |
|---|---|---|---|
| FRED (Federal Reserve) | Credit spreads (HY OAS), Corporate Profits | Daily / Quarterly | Free, government |
| FMP (Financial Modeling Prep) | S&P 500 EPS, P/E ratios, SPY price, historical bars | 5-min to 7-day cache | Paid API |
| Unusual Whales | Option chains, IV rank, flow alerts, dark pool, GEX | 1-min to 5-min cache | Paid API |
| Perplexity | Live news search | 5-min cache | Paid API |
Signal Engine
The decision tree is deterministic — it evaluates three questions:
- Are corporate earnings growing? (threshold: > -2% YoY)
- Are credit spreads tight? (quartile ≤ Q2)
- Is valuation dispersion in the top quartile? (Q4 = max fear)
Base probabilities (0.50–0.78) are calibrated from walk-forward backtest data with Bayesian-blended quartile bonuses.
Pricing Model
- Black-Scholes model with VIX as a market-wide IV proxy
- VIX is not strike-specific — it ignores volatility smile/skew
- Real bid/ask from Unusual Whales used when available; B-S estimate as fallback
- Risk-free rate assumed at 4.5% annually
Position Sizing
- Base risk: 5% of stated bankroll per trade
- Half-Kelly criterion (conservative — avoids ruin risk)
- Adjusted for IV rank, GEX regime, and term structure
Key Limitations
- Earnings signal is weak: r² = 0.01 (1% explanatory power), capped at ±0.03 bonus
- CAUTION signal accuracy is low: ~52% (near coin flip), sized at only 0.06× Kelly
- Sharpe ratio is modest: Below institutional threshold (need >1.5 for fund-grade)
- CSCV overfitting test: High probability of in-sample overfitting detected
- VIX as IV proxy: Market-wide, does not capture strike-specific dynamics
AI Chat Disclaimer
The AI chat is powered by Claude (Anthropic). AI responses:
- Are generated by a language model, not a financial professional
- May contain inaccuracies, hallucinations, or outdated information
- Should never be treated as financial advice
- Are subject to the model's training data cutoff and may not reflect current events
No Personalization
This system does not consider your:
- Financial situation, income, or net worth
- Investment objectives or time horizon
- Risk tolerance or experience level
- Tax situation or legal constraints
Any content that appears personalized (e.g., bankroll-based sizing) is purely mechanical — it is not tailored investment advice.
Contact
Questions about risk? Reach out via the contact page.