arXiv:2507.08584v1 Announce Type: cross Abstract: Large language models (LLMs) are increasingly deployed in agentic frameworks, in which prompts trigger complex tool-based analysis in pursuit of a goal. While these frameworks have shown promise across multiple domains including in finance, they typically lack a principled model-building step, relying instead on sentiment- or trend-based analysis. We address this gap by developing an agentic system that uses LLMs to iteratively discover stochastic differential equations for financial time series. These models generate risk metrics which inform daily trading decisions. We evaluate our system in both traditional backtests and using a market simulator, which introduces synthetic but causally plausible price paths and news events. We find that model-informed trading strategies outperform standard LLM-based agents, improving Sharpe ratios across multiple equities. Our results show that combining LLMs with agentic model discovery enhances market risk estimation and enables more profitable trading decisions.