Primer #7: Intro To The Funnel Process
Implementation Unit #1
As promised, moontower.ai includes a primer which is being dripped 1 post a week right here on substack.
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The moontower.ai Primer is divided into 2 units: Conceptual and Implementation.
To review, the Conceptual Unit which includes:
We now move to the Implementation Unit which is more of a manual.
Intro To The Funnel Process
A Reminder Why You Are Using moontower.ai
You are an investor using options surgically to:
speculate
hedge
capture a yield
moontower.ai is a tool that uses a volatility trader’s lens to compare relative values between options so you can narrow down the most effective expressions of your idea or goal.
The foundation of the research process is measurement and comparison.
Progressing Through The Funnel
Recall:
Let’s modify the diagram to substitute the moontower.ai tools used for each function.
The flow is:
1) Cross-sectional lens
The Dashboard, Real Vol, and Skew calibrate a sense of what’s fair. The Vol Scanner underscores large changes in fixed strike implied volatilities.
2) Zooming in for a closer look
The Tickers and Pairs tools allow the user to drill down further.
The Vol Scanner can also be used at the bottom of the funnel to narrow down the strike or strike range to trade.
In the next section, we'll discuss the top of the funnel — the cross-sectional lens and how we can infer fair value.