robinhood-options-mobile

Autonomous Agentic Risk Copilot

Overview

The Autonomous Agentic Risk Copilot (RiskCopilotService) provides continuous portfolio surveillance across three core danger vectors:

1. Overnight Gap Risk: Assesses after-hours and weekend price vulnerability on broad indices, high-beta single stocks, leveraged ETFs (e.g., TQQQ, SOXL), and short option contracts.
2. Earnings Hazard Warnings: Cross-references held positions against the upcoming earnings calendar and quantitative IV crush models, warning of 40%–70% extrinsic value collapse on long options and explosive gamma tail jumps on short options.
3. Suggested Delta Hedges: Quantifies directional delta exposure ($ move per 1% underlying shift) and computes precise share hedges and option protective structures (protective puts, covered collars, delta rebalancing) through deep integration with DeltaNeutralService.

The engine generates an actionable Safety Score (0–100), an overall Risk Severity (normal, elevated, high, critical), and a prioritized Mitigation Action Checklist with one-tap deep-linking directly into relevant trading tools.

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Features & Analytical Capabilities

1. Overnight Gap Risk Engine

• Heuristic & Statistical Shock Model: Evaluates asset beta ((\beta)) and leverage factor multipliers to simulate potential overnight gaps ((3\% \times \beta \times \text{leverage})).
• Short Option Jump Risk Escalator: Penalizes naked short calls and short puts which face uncapped or severe tail gaps without underlying share coverage.
• Exposure Sizing & Severity Matrix:
  • critical: Unhedged naked short options, potential gap loss exceeding 7.5% of portfolio equity, or leveraged ETF holdings exceeding 20% of equity.
  • high: Leveraged ETF positions exceeding 10% of equity, or potential gap loss exceeding 4.5% of equity.
  • elevated: High-beta holdings ((\beta > 1.4)) or potential gap loss exceeding 2% of equity.
  • normal: Well-diversified, hedged holdings within standard tolerance.

2. Earnings Hazard Warning System

• Calendar & Expiration Cross-Referencing: Matches held stock and option positions against scheduled earnings events within a 14-day lookahead window.
• Hazard Type Classification:
  • ivCrush: Flags long calls and puts held across earnings releases, predicting extrinsic volatility deflation post-announcement.
  • gammaTailRisk: Flags short options facing explosive gamma jumps and assignment risk if the underlying blows through the expected move.
  • earningsGap: Directional stock gap exposure prior to announcement.
• Timing & Urgency Escalation:
  • (\le 2\text{ days}) with option contracts: critical severity. Recommends closing long contracts or converting short legs to defined-risk iron condors before market close.
  • (\le 5\text{ days}) with options: high severity. Recommends rolling out in cycle or establishing collars.
  • (> 5\text{ days}): elevated severity with proactive volatility expansion monitoring.

3. Suggested Delta Hedges Engine

• Net Greek Aggregation: Integrates seamlessly with DeltaNeutralService.importExistingPositions and DeltaNeutralService.computeAnalysis.
• Directional Sensitivity: Computes net position delta and exact dollar PnL impact per 1% change in spot price ((\text{Net Delta} \times \text{Spot} \times 0.01)).
• Concrete Actionable Hedges:
  • Exact shares to buy/sell to achieve target neutrality ((\Delta = 0)).
  • Precise option structures (e.g. “Buy 2x ATM Put” or “Collar with OTM Call”) to hedge net long or short exposure.
  • Distinguishes between active options structures (strict delta tolerance) and standard diversified equity investments to prevent false alarms.

4. Prioritized Mitigation Action Checklist

• Compiles cross-hazard mitigation recommendations into a unified, prioritized task list sorted by urgency (critical (\to) high (\to) elevated).
• Each mitigation action features:
  • Clear diagnosis and risk rationale.
  • Concrete mitigation directive (e.g., “Close or collar naked short options before 4:00 PM EST close”).
  • Seamless deep-linking target route (instrument, delta_neutral, or earnings_calendar).

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Domain Architecture

lib/model/risk_copilot_model.dart
├── RiskCopilotSeverity (normal, elevated, high, critical)
├── EarningsHazardType (ivCrush, gammaTailRisk, earningsGap)
├── GapRiskAssessment
├── EarningsHazardAssessment
├── DeltaHedgeAssessment
├── RiskCopilotMitigationAction
└── RiskCopilotReport (JSON serialization, metrics, safety score)

Key Interfaces

class RiskCopilotReport {
  final DateTime generatedAt;
  final RiskCopilotSeverity overallSeverity;
  final double overallScore; // 0 - 100
  final String statusHeadline;
  final String summary;
  final double totalOvernightGapExposure;
  final double portfolioNetDelta;
  final List<GapRiskAssessment> gapRisks;
  final List<EarningsHazardAssessment> earningsHazards;
  final List<DeltaHedgeAssessment> deltaHedges;
  final List<RiskCopilotMitigationAction> mitigationActions;
}

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UI Components & Navigation

1. AgenticRiskCopilotCard (lib/widgets/portfolio/agentic_risk_copilot_card.dart):
   • Progressive-disclosure analytics card embedded directly on the Portfolio > Risk section page (RiskSectionPage).
   • Displays live Safety Score (with color-coded gauge), critical hazard badges, top mitigation actions, and an expandable preview.
   • Includes a “View Full Copilot Report” CTA navigating to RiskCopilotWidget.
2. RiskCopilotWidget (lib/widgets/risk_copilot_widget.dart):
   • Comprehensive full-screen copilot dashboard.
   • Header summary banner with safety score gauge, risk badge, and executive summary.
   • Key metric pills: Overnight Gap Risk, Net Delta, and Imminent Earnings countdown.
   • Interactive checklist of prioritized mitigation actions with direct action buttons.
   • Three tab views:
     • Overnight Gap: Position notional, beta, estimated gap %, and dollar exposure breakdown.
     • Earnings Hazards: Implied moves, crush probabilities, and position warnings.
     • Delta Hedges: Net delta, dollar move per 1%, share hedge suggestions, and option hedge recommendations.
3. Action Center Integration (PortfolioAlertService):
   • Evaluates copilot report and generates actionable alerts with PortfolioAlertTarget.riskCopilot.
   • Critical alerts (risk-copilot-critical-gap, risk-copilot-earnings-iv-crush) trigger high-visibility alerts with direct navigation into the Risk Copilot view.
   • Normal portfolios suppress noise to maintain high signal-to-noise ratio.

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Verification & Testing

• Engine Unit Tests (test/risk_copilot_service_test.dart):
  • Comprehensive model JSON serialization round-trips.
  • Overnight gap risk detection across leveraged ETFs (TQQQ, SOXL) and unhedged short options.
  • Imminent earnings IV crush hazard detection and countdown tracking.
  • Directional delta imbalance analysis and hedge recommendations.
  • Prioritized mitigation checklist generation and routing targets.
  • Action Center alert integration and clean-state suppression.
• Static Analysis: Verified with flutter analyze with 0 warnings or errors across all added and updated library files.