Sharpness quality
Last updated
Last updated
Range sharpness measures how narrow or precise a trader's selected price interval is, relative to the current price of the token. It captures the trader’s willingness to make a high-confidence, precision prediction versus a broad, lower-risk hedge.
This produces a dimensionless value that is consistent across assets with different price scales. To map this to a normalized score between 0 and 1 (where 1 is extremely sharp and 0 is extremely broad), we use an exponential scoring function:
With initial parameters set to k=0.25:
Sample values:
0.05
0.993
Very sharp, high precision bet
0.10
0.95
Moderately sharp
0.25
0.63
Balanced between risk and coverage
0.50
0.39
Broad, conservative prediction
1.00
0.22
Very wide range