At MarkeTopper, we consider ourselves to be in the
Risk management in an investment fund is a continuous process with financial markets always testing the bounds of the process. Managing risk in any organization like ours is always a work in progress with no guarantees of covering all aspects of investment but an assurance that under those conditions where the bounds of the existing process are being tested, the system shall respond well in advance of impending dangers.
To effectively contain Model Risk, we have developed a multi-layer security mechanism by which we can monitor risk at the most granular level that is at the level of a single algorithm. Then following a bottoms up approach, real time risk assessment is done at the portfolio level (for the basket of algorithms designed by an analyst). and also at the fund level (which is the cumulative risk gleaned from multiple portfolios). This is done by specialized software which has been developed by us. .
To control Market Risk, we have developed portfolios with the largest possible bandwidth, trading more than 100 top stock futures, Index futures, Exchange Rate futures and Commodity futures
To effectively deal with Liquidity Risk we focus only on trading instruments with low impact cost and we limit our trading position for any trading instrument to be only a small percentage of its daily market volume.
To effectively manage Operational risk, we have put in place a number of systems and processes which decide as to the volume of execution from each individual trading terminal, the number of instruments to be executed from each work station, also we have specialized software (trading platform) that perform the real time checks for the placement price of thousands of orders that get executed in any given day.