The Fobs Approach to Risk
Preserving our clients’ capital, ensuring high-quality risk management, and developing reliable and safe software are paramount priorities for us.
Hence, we have meticulously engineered a stringent risk management system that vigilantly oversees diverse risk types, maintaining them within predetermined thresholds. The Risk Management module could be fully or partially integrated into any solutions that we are developing.
Furthermore, it is our responsibility to clarify risks that are beyond our control for our clients.
Each type of risk is addressed in subsequent sections.
However, it is important to note that we cannot guarantee immunity against partial or total asset loss in the face of unforeseen events.
Likewise, we cannot ensure profit guarantees.
Market risk
Market risk embodies the potential for losses stemming from unfavorable market price fluctuations.
Typically quantified by instrument volatility, it necessitates consistent monitoring of open positions’ volatility.
Our risk management system adjusts balances to maintain stipulated drawdown levels.
Credit risk
Credit risk, synonymous with counterparty risk, encompasses potential losses arising from borrowers or counterparties defaulting on obligations.
We manage this risk by diligently evaluating and maintaining relationships with counterparties, thereby mitigating undue reliance on any single entity.
Operational risk
Operational risk delineates the chance of losses due to internal process errors, technological system failures, or external influences.
Given our reliance on trading algorithms for executing investment strategies, we acknowledge operational risk arising from algorithmic failures or technological flaws.
Liquidity risk
Liquidity risk denotes the potential inability to promptly trade an asset without significantly impacting the market.
It can lead to losses, substantial slippage, or failure to close positions at desired prices.
Margin risk
Margin risk involves potential losses due to collateral requisites from brokers, leading to position liquidation due to insufficient capital to uphold investment positions.
In our context, margin risk emerges from the utilization of derivatives with inherent leverage attributed to margin financing.
Execution risk
Execution risk encompasses the probability of varying transaction prices from the investment decision to execution.
We employ automated execution algorithms to mitigate this risk, striving to seize investment opportunities promptly.
Your trust is essential to us, and we’re committed to transparency and vigilance in managing risks.