Risk Disclosure
Important information about risks associated with institutional trading and market making
Risk Framework 2025
⚠️ Important Risk Warning
Trading and market making activities involve substantial risk of loss. Past performance is not indicative of future results. You should carefully consider whether such activities are suitable for your financial situation and risk tolerance. Only invest capital that you can afford to lose.
Market Risks
Price Volatility Risk
- • Sudden price movements can result in significant losses
- • Market volatility may exceed historical patterns
- • Correlation breakdowns during stress periods
- • Gap risk during market open/close periods
Liquidity Risk
- • Reduced market liquidity during stress conditions
- • Wider bid-ask spreads and increased transaction costs
- • Difficulty in unwinding large positions
- • Market fragmentation and venue-specific risks
Credit Risk
- • Counterparty default and settlement risk
- • Clearing house and exchange failures
- • Margin and collateral requirements
- • Credit rating downgrades and spread widening
Currency Risk
- • Foreign exchange rate fluctuations
- • Cross-currency basis risk
- • Central bank policy changes
- • Political and economic instability
Operational Risks
Technology & System Risks
System Failures
- • Trading system outages and connectivity issues
- • Data feed interruptions and latency spikes
- • Algorithm malfunctions and erroneous orders
- • Backup system activation delays
Cybersecurity
- • Cyber attacks and data breaches
- • Unauthorized access to trading systems
- • Market manipulation through system compromise
- • Business continuity disruptions
Execution & Processing Risks
Order Management
- • Order routing and execution delays
- • Partial fills and slippage costs
- • Incorrect order parameters or quantities
- • Settlement and clearing failures
Human Error
- • Manual trading errors and fat finger trades
- • Incorrect risk parameter settings
- • Miscommunication and process failures
- • Inadequate supervision and controls
Regulatory & Legal Risks
Regulatory Changes
- • New regulations affecting market structure
- • Changes in capital and margin requirements
- • Trading restrictions and position limits
- • Compliance costs and operational impacts
Legal & Compliance
- • Regulatory investigations and enforcement actions
- • Client disputes and litigation risks
- • Cross-border regulatory conflicts
- • Documentation and contractual risks
Asset-Specific Risks
Cryptocurrency Risks
- Extreme Volatility: Cryptocurrency prices can experience dramatic fluctuations within short periods
- Regulatory Uncertainty: Evolving regulatory landscape may impact market access and operations
- Technology Risk: Blockchain network issues, forks, and protocol changes
- Custody Risk: Digital asset storage and key management vulnerabilities
Foreign Exchange Risks
- Interest Rate Risk: Central bank policy changes affecting currency valuations
- Political Risk: Government instability and policy uncertainty
- Economic Risk: Macroeconomic indicators and trade balance impacts
- Intervention Risk: Central bank market interventions
Our Risk Management Approach
Real-Time Monitoring
- • Continuous position and exposure monitoring
- • Automated risk alerts and circuit breakers
- • Stress testing and scenario analysis
- • Independent risk oversight and reporting
Control Framework
- • Pre-trade risk checks and position limits
- • Diversification and concentration controls
- • Liquidity and market risk management
- • Regular model validation and backtesting
Important: While we implement comprehensive risk management systems, no risk management framework can eliminate all risks. Clients should conduct their own risk assessment and maintain appropriate risk controls.