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Risk Management

Just because digital assets are volatile doesn’t mean they are inherently risky. Utilizing a multilayered approach to risk, that covers every aspect of our operations, from cybersecurity and physical hardware, to trading and counterparty risk, risk management is at the heart of everything we do.


Concentration

We believe that an actively managed digital asset strategy should be fairly concentrated during times of market dislocations and periods of gross inefficiencies, to generate above-benchmark long-term returns.


Sizing

We will invest greater amounts of capital in digital assets where we find greater risk-adjusted value and vice versa. If blockchain flow data suggests that target prices can no longer be supported, we will reduce the weighting of that position or exit the position altogether.


Active Hedging

We believe our risk-adjusted value approach to digital asset selection that melds blockchain data analytics and in-depth research, with active hedging using derivatives, can generate superior risk-adjusted returns over a three-year to five-year time horizon.



Trade Profit & Loss

Trade Profit & Loss algorithms use mark-to-market valuations of open contracts with realized profit and loss, providing intraday insight into actual portfolio performance, split up in strategy types, instruments and any other dimension required by our traders.


Max Drawdown

Automated monitoring of any declines in Trade Profit & Loss is a key portfolio preservation tool. Our software calculates the drop from the last cumulative Trade Profit & Loss peak and automated trading algorithms are authorized to liquidate trading positions if maximum allowed drawdown has occurred.


Limit Structures

Active trading limits are set based on a broad category of factors including, trade size, instrument, segment, strategy and liquidity across the entire trading portfolio.


Our risk management software actively calculates at-the-moment cryptocurrency values and portfolio preservation actions are automated to act decisively during market externalities.


Execution-To-Model

We constantly compare actual performance against our modeled performance and trading programs are designed to automatically improve and/or report on areas where results have not reflected model projections as well as opportunities to optimize performance.


Execution-To-Model uses model-simulated performance and pre-defined trading costs and slippage as a reference, constantly overlaying and mapping actual performance against modeled performance.

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Important Risk Information



The information provided on this site is for informational purposes only. It is not to be construed as investment advice or a recommendation or offer to buy or sell any security. Prospective clients should always obtain and read an up-to-date product and/or services description or prospectus before deciding whether to invest. Any views expressed herein are those of Novum Alpha SPC (“the Company”) are based on available information, and are subject to change without notice. There are no guarantees regarding the achievement of investment objectives, target returns, or measurements such as alpha, tracking error, asset weightings and other information ratios. The views and strategies described may not be suitable for all clients. The Company does not provide tax or legal advice. Prospective subscribers should consult with a tax or legal advisor before making any investment decision. Investing in any investment product entails risks and there can be no assurance that the Company avoid incurring losses or achieve any of a prospective subscriber’s investment goals.


Performance quoted represents past performance, which is no guarantee of future results. Investment and principal value will fluctuate, so you may have a gain or loss when assets are sold. Current performance may be higher or lower than that quoted product’s expenses and other liabilities, and such product may be unable to meet its investment objective