Risk Management
Protecting Capital
Effective risk management procedures are a delicate balancing act. Too strict; ideas and returns are restrained. Too lax and hard won profits can be lost.
Risk Philosophy
"Over 25 years trading in both bull and bear markets has instilled in us the habits of limiting risk and spreading market exposure."
— BlackRidge Capital Investment Team
Balancing Act
We maintain the delicate balance between capturing opportunities and protecting capital.
Institutional Grade
Our risk framework meets the standards of our institutional service providers and prime brokers.
Our Rules
Stop Losses
Trailing stop losses on positions based on historic volatility
Position Limits
1% max initial risk per position
Diversification
Maintain exposure to at least 10 markets
Trader Teams
We've built risk management into our operations at a fundamental level. Our trader teams hold each trader accountable to the other.
Preventing Common Pitfalls
Trading Tunnel Vision
Team-based accountability requiring justification for investment rationale
Concentrated Risks & Losses
Diversification requirements and position limits enforced at team level
Misuse of Leverage
Risk-to-reward ratio review and institutional oversight
Institutional Oversight
Beyond internal controls, our traders are bound by the risk covenants of our institutional service providers and prime brokers.
Goldman Sachs
As one of the world's leading investment banks, Goldman Sachs provides prime brokerage services with institutional-grade risk monitoring and margin requirements.
Their professional risk management eyes provide an additional layer of oversight for all trading activity.
Hurricane Capital
Hurricane Capital, LLC provides additional prime brokerage services, ensuring robust operational infrastructure and risk controls.
Together with Goldman Sachs, they provide comprehensive coverage and multiple checkpoints for risk management.
Multi-Layered Protection
Position
1% max risk
Portfolio
10+ markets
Team
Peer review
Institutional
Prime broker oversight