Glossary
We explain the complex in simple terms
Perpetual futures
Futures that do not have an expiration date.
The Funding Rate
The rate paid by holders of perpetual futures to the opposite position holders.
Drawdown
The maximum potential loss experienced by a strategy.
Stress Scenario
The probability of losses associated with extreme market conditions.
Risk Rating
A scale from 1 to 7 indicating the risk level of investments, where 1 represents the lowest risk.
1
Risk Rating is an aggregated numerical indicator of risk of an investment opportunity. The indicator is scaled from 1 to 7, where 1 is the least and 7 is the highest probability of loss.
2
Risk Rating is calculated due to methodology of
PRIIPS
and consists of the two parts: quantitative and quality. The quantitative part is determined as the max value of Value at Risk and Stress Test.3
The quality part evaluate all no numerical assumptions of product like liquidity and credit risk of the exchange.
Marginal losses
| Risk Rating | Max Drawdown |
|---|---|
1 Low | 5% |
2 Low | 10% |
3 Low | 20% |
4 Medium | 40% |
5 Medium | 60% |
6 High | 80% |
7 High | 100% |
How We Avoid Risks
Market Risk
The risk of losses from exchange rate changes is mitigated, achieving a near-zero probability in our strategy.Loss probability is minimized to zero by holding two opposite positions in assets, ensuring full risk hedging.
Credit Risk
The probability of incurring losses due to the realization of the exchange's credit risk.Risk is diversified across multiple exchanges, including OKX, ByBit, KuCoin, and Binance.
Cyber Risk
The probability of incurring losses due to hacking of the exchange by a hacker group and subsequent theft of funds.Risk is mitigated due to usage a number of exchanges with several subaccounts and also adhere to all cybersecurity rules.
Interest Rate Risk
The probability of incurring losses due to unfavorable funding rates or increased commission costs.The strategy avoids situations of negative interest rates.
