Build the market context.
Consider policy, liquidity, volatility and the flow of information. Review how a market view relates to conditions elsewhere in the investment universe.
What is changing, and what could challenge the view?
From perspective
to a considered position.
A closer look at how market context, portfolio exposure and execution discipline inform the investment process.
THE DECISION PROCESS
Context before commitment.
Each stage connects the initial market view to portfolio exposure, implementation and the ongoing review of a position.
Assess the portfolio fit.
Consider the proposed exposure alongside existing positions, concentration and available capital. A broad universe does not require participation in every market at all times.
How does this exposure affect the portfolio as a whole?
Define the implementation.
Apply position sizing, trade structure, margin and entry and exit rules. Liquidity and execution conditions can affect the price and size at which a trade can be implemented.
How is the position expressed, sized and managed?
Revisit the decision.
Monitor exposures and changing market conditions. Systematic inputs support a consistent framework; human judgement remains part of review and intervention.
Does the position still fit the conditions and framework?
THE INVESTMENT UNIVERSEFour market groups.
Four market groups.
Different drivers.
Each market brings its own information, trading conditions and risks. Select a group to explore what informs our review.
01 / DIGITAL ASSETS
Continuous markets. Distinct conditions.
Digital-currency markets combine continuous price discovery with changing liquidity and venue conditions.
Liquidity, volatility and market structure
Price movements and market participation are considered alongside available liquidity and the reliability of trading venues.
Venue, counterparty and technology exposure
Trading disruption, counterparty failure and sharp price changes can affect execution and asset access.
02 / MACRO
A view across the economic cycle.
Macro-linked instruments connect policy and economic developments with equity-index and energy markets. Examples include US 100, S&P 100, S&P 500, oil and natural gas.
Policy, economic releases and supply dynamics
Rates, economic activity and market breadth inform index analysis; energy markets also respond to supply, demand and geopolitical events.
Event-driven moves and changing relationships
Economic releases and supply shocks can create abrupt moves. Relationships between markets may change when conditions shift.
03 / METALS
Rates, demand and the dollar.
Metals are considered through monetary conditions, inflation expectations and physical supply-and-demand dynamics.
Real yields, inflation and currency conditions
Changes in rates and the US dollar can interact with demand and market liquidity. These relationships are reviewed in context.
Volatility and concentration
Metals can experience sharp losses. Similar drivers across positions can increase concentration even when instruments differ.
04 / FX
Relative value across currencies.
Currency pairs reflect the relationship between economies, monetary-policy paths and global capital flows.
Policy divergence, liquidity and capital flows
The review considers both sides of a currency pair, the information calendar and changing trading conditions.
Gaps, leverage and execution
Unexpected policy decisions and reduced liquidity can move exchange rates abruptly and affect execution at intended levels.
These groups describe the investment universe, not current holdings, allocations or recommendations. Instruments and participation remain subject to the applicable investment mandate and private documentation.
RISK FRAMEWORKControls throughout
Controls throughout
the life of a position.
Risk is considered before implementation and through ongoing monitoring. Controls support the process; they cannot eliminate losses.
Position sizing & exposure
Consider exposure at trade and portfolio level, including concentration and the interaction between positions.
Execution discipline
Entry, exit, margin and stop-loss rules form part of implementation. Gaps and reduced liquidity can prevent execution at intended levels.
Loss limits & review
Loss limits and review procedures guide responses to adverse conditions. They do not guarantee recovery or capital preservation.
Human oversight
People monitor the framework, review changing conditions and retain responsibility for intervention.
RISKS & LIMITATIONS
What remains beyond the controls.
Market & gap risk
Prices can move sharply, including through intended exit levels. Correlations can change and exposures can become concentrated.
Liquidity & leverage
Limited liquidity can restrict exits. Leverage and margin requirements can magnify losses and create additional funding pressure.
Counterparties & venues
Counterparty failure and venue disruption can affect trading, settlement and access to assets.
Technology & operations
System, data and process failures can affect decisions and implementation. Systematic inputs and human oversight are both subject to limitations.
Investments involve risk, including loss of capital. No control framework, diversification approach or trading rule guarantees capital preservation or a particular return.
Read the website disclosures ↗A CLOSER CONVERSATION
Contact us ↗Questions about the approach?
Contact the TradeX team to discuss the investment framework.