Risk Management Framework
Intro
The strategy is designed with capital protection as the primary operational priority. All trade executions are contingent upon predefined risk validation parameters, and capital exposure remains structurally isolated throughout the full investment cycle.
The system does not seek profit by accepting risk; instead, it accepts trades only when full risk coverage is achievable.
CapitalIsolation Policy
Principal capital remains untouched during all trading operations.
Hedge positions ensure the underlying trade does not impact principal
No trade is executed unless risk neutrality can be confirmed
Principal capital is kept isolated in a secured reserve
Only option premium exposure is used during execution
EntryValidation Conditions
Trades are authorized only if the following conditions are simultaneously met:
| Validation Category | Minimum Requirement |
| Trend confidence | ≥ 85% |
| Volatility clarity | Defined as stable expansion or contraction |
| Hedge capacity | Available and effective |
| Liquidity profile | Meets required order execution depth |
| Market stability | Not within active shock or abnormal pricing periods |
If any condition is not satisfied → No trade is executed.
ManualOversight
A supervisory review layer allows for position override or non-entry in case of irregular conditions beyond model detection.
If model signals entry but volatility or liquidity environment changes before execution, entry is aborted.
Automated RiskControls
Real-time monitoring of hedge integrity
Exposure threshold tracking
Automatic position cancellation if deviation exceeds limit
No leverage utilized
No dependency on correct price prediction
No exposure to directional market risk
Capital is isolated during the full trading cycle
Volatility RiskFramework
The system continuously monitors changes in volatility regimes.