The same strategy at 10% position size and 50% position size can mean the difference between steady compounding and a blown account. Stock selection, timing, and factor design answer “what to buy.” Position sizing answers “how much.” The Kelly Criterion is the mathematical optimum for that question. ...
Adjust parameters, watch Greeks change in real time. Based on the Black-Scholes model, this calculator covers first-order Greeks (Delta, Gamma, Theta, Vega, Rho) and second-order Greeks (Vanna, Charm, Volga). Drag any slider and both the numbers and the curve update instantly. For formula derivations, see the Option Greeks Guide. For second-order Greeks, see Vanna, Charm, Volga Explained. For trading applications, see Greeks in Practice. ...
This is the final article in the Alpha 101 series. The liquidity and composite group contains 23 factors with the most complex formulas of all five categories: the deepest nesting, the highest usage of decay_linear and IndNeutralize, and the most elaborate conditional logic. But complexity doesn’t mean obscurity. At their core, these factors tell the same story: follow the smart money. The overview established the classification framework. The previous three articles covered price-volume divergence, momentum and reversal, and volatility and intraday structure. After breaking down 4 classic factors here, we’ll discuss how to move from “single-factor research” to “factor portfolio construction.” ...
Alpha 101 contains 11 volatility factors and 12 intraday structure factors. They share the same raw inputs (open, high, low, close, vwap) and a similar economic intuition: extracting signals from price “shape” rather than price “direction.” The overview introduced the framework. This article picks 5 classic factors for detailed breakdowns. ...
Momentum and reversal sound like opposites: momentum says “what’s rising keeps rising,” reversal says “what’s risen too much will fall.” Alpha 101 has 23 factors in this category, and their sophistication lies in not blindly picking a side. Instead, they use different conditions to judge whether the current regime favors momentum or mean-reversion. The overview introduced the broad framework. This article picks 5 classic factors and breaks down the conditional logic embedded in their formulas. ...
Price-volume divergence is the largest category in Alpha 101, with 32 factors. As covered in the overview, the core thesis fits in one sentence: price and volume should move together, and when they don’t, there’s a trading opportunity. This article picks 5 classic factors from the group, breaks down each formula layer by layer, and examines how WorldQuant turned the ancient technical analysis concept of “volume confirms price” into computable signals. ...
In 2016, Zura Kakushadze from WorldQuant published a six-page paper titled “101 Formulaic Alphas.” The paper did something unusual: it listed the exact formulas for 101 quantitative factors, 80 of which were running in WorldQuant’s production environment. These factors have holding periods of 0.6 to 6.4 days and an average pairwise correlation of just 15.9%. The paper gives formulas but zero explanation. Why does Alpha#3 look the way it does? What market phenomenon is it trying to capture? Not a word. That gap is what this series fills: we classify all 101 Alpha 101 factors by their economic logic, break down the formulas, and figure out what each factor is actually betting on. ...
Options trading has two profit engines: directional bets and volatility bets. Most retail traders only use the first one, buying calls to bet up and puts to bet down. But the other half of an option’s value comes from volatility trading: you do not need to know which way the underlying moves, only whether the magnitude of the move will exceed or fall short of market expectations. This article covers six core volatility trading strategies, split into long vol and short vol groups. Each strategy comes with a payoff diagram, use cases, and concrete numbers, building toward a practical decision framework: check IV Rank, pick a strategy. ...
The first two articles covered first-order Greeks and second-order Greeks, building up the math, the intuition, and the code. This article does one thing: use those numbers to make trading decisions. What Greeks profile does each strategy carry? How does Delta hedging actually work in discrete time? When does Gamma Scalping have positive expected value? How do market makers use Greeks for risk management? Numbers and code throughout. This is the final article in the Option Greeks series. ...
The previous article covered the five first-order Greeks: Delta, Gamma, Theta, Vega, and Rho. They handle hedging and risk management well, with one assumption: the first-order Greeks themselves are stable. They are not. The underlying moves, and Delta changes (that is Gamma). Volatility shifts, and Delta changes again, but first-order Greeks have no name for this effect. Second-order Greeks fill that gap: they quantify the instability of first-order Greeks themselves. This is part two of the Option Greeks series. It covers the three most important second-order Greeks (Vanna, Charm, Volga), plus their role in volatility surface modeling. Part three covers trading applications. ...