Stock Hedge - News Sentiment Analysis for Stocks and Options trading

A Python-based system for analyzing financial news sentiment and calculating options hedging strategies using the Black-Scholes model. The project leverages AI-powered sentiment analysis (FinBERT) to classify market news as bullish or bearish signals.

Overview

This repository combines financial news analysis with quantitative options pricing to support informed hedging decisions:

• News Aggregation: Fetches real-time business news from NewsAPI
• Sentiment Analysis: Uses FinBERT (financial domain pre-trained transformer) to analyze market sentiment
• Ticker Extraction: Identifies company tickers from news articles using pattern matching and company name mapping
• Options Pricing: Black-Scholes model implementation for call/put pricing and Greeks calculation
• Delta Hedging: Automated hedge position calculation based on option deltas

Getting Started

Prerequisites

• Python 3.8+
• NewsAPI key (get one at newsapi.org)

Installation

1. Clone the repository (or navigate to the project directory)

2. Install dependencies:

   pip install -r requirements.txt

3. Set up environment variables:

   Create a .env file in the project root:

   NEWSAPI_KEY=your_newsapi_key_here

Running the Application

Execute the news sentiment analysis pipeline:

python src/pipeline/main.py

This will:

• Fetch the latest 100 business news articles
• Analyze sentiment for each article
• Classify articles as BULLISH, BEARISH, or NEUTRAL
• Display sentiment scores and signals
• Track cumulative bullish/bearish article counts

Configuration

Edit src/config/settings.py to customize:

• SENTIMENT_POSITIVE_THRESHOLD: Minimum confidence for bullish signal (default: 0.7)
• SENTIMENT_NEGATIVE_THRESHOLD: Minimum confidence for bearish signal (default: 0.7)

Contributing

This is an active project. Key areas for improvement:

• Ticker extraction accuracy (see TODO in tickers.py)
• Portfolio optimization algorithms
• Multi-asset hedging strategies
• Backtesting framework

---

Disclaimer: This software is for educational and research purposes only. Not financial advice. Always conduct your own research and consult with financial professionals before making investment decisions.