Risk Management


Pre-Event
●  Checks and balances among PMs: To avoid PM’s personal bias and emotion.
●  In order to improve hit rate, we have multiple analysts to cover the target company which allows us to evaluate risks and opportunities from various perspectives. We conduct in-depth field investigation on potential investment targets to identify risks.
●  Veto system: To help us avoid high company risk, we adopt a veto system on high risk investment targets.
 
 
During the Event
●  Set maximum holding limits on stocks outside our investment pool, single security, derivatives and speculative FX positions. Orders are prohibited once limit is reached.
●  Set limit on net exposure, gross exposure and related security positions. PMs would be forced to reduce the position once limit is reached.
 
 
Post-Event
●  Real time risk monitoring and reporting: Focuses on indicators such as daily loss of single position, level of loss of index, etc. and notifies the PM accordingly.
●  Disciplined stop loss: Once maximum drawdown reaches a certain threshold, the PM would be required to submit a written review.
●  Cool down period:If the drawdown limit was breached for a 2nd time, ,the PM would be forced to reduce his/her positions and a maximum position limit would be put on.