Algotoria Risk Notice
This notice provides critical information regarding the risks associated with the systematic investment strategies managed by Algotoria Limited.
1. General Investment Risk
Investing in digital assets and futures carries high levels of risk and may not be suitable for all investors.
The strategies primarily involve "Virtual Assets" and perpetual futures, which are subject to extreme price volatility.
Algotoria utilizes leverage to implement its strategies, which magnifies both potential gains and losses.
The management of assets relies on proprietary technology and third-party infrastructure.
Client assets are held in Separately Managed Accounts (SMAs) with third-party VASPs (e.g., Binance, OKX, Bybit).
The strategies are 100% systematic and automated.
1. General Investment Risk
Investing in digital assets and futures carries high levels of risk and may not be suitable for all investors.
- Potential for Total Loss: There is a significant chance of losing the entirety of your allocated assets.
- Prudent Allocation: It is recommended that investors do not allocate more than 10% of their total savings to these high-risk strategies.
- No Guarantees: Past performance, whether based on actual trading or historical backtesting, is not indicative of future results.
The strategies primarily involve "Virtual Assets" and perpetual futures, which are subject to extreme price volatility.
- Market Risk: Sudden and drastic price movements in virtual assets can lead to substantial losses in a short period.
- Liquidity Risk: During periods of extreme market stress, certain instruments may become difficult to value or trade, potentially hindering execution.
- 24/7 Market Operations: Digital asset markets operate continuously. Rapid changes in account value can occur at any time, including weekends and holidays.
Algotoria utilizes leverage to implement its strategies, which magnifies both potential gains and losses.
- Leverage Limits: Depending on the selected risk profile, maximum leverage can reach up to 300% (x3.0) of the account value.
- Drawdown Expectations: While typical annual drawdowns are generally observed in the 20-25% range, historical backtests over a 5-year period have shown drawdowns reaching 30%. Clients should be prepared for volatility of this magnitude.
The management of assets relies on proprietary technology and third-party infrastructure.
- API and Software Failure: Inherent risks exist regarding development failures, bugs, or technical errors in the Application Programming Interface (API) used for trade execution.
- Cybersecurity: Virtual assets and Service Providers (VASPs) are frequent targets for fraud, market manipulation, and cybersecurity breaches.
- Infrastructure Reliability: Electronic communications may be delayed, intercepted, or fail due to internet instability or hardware malfunctions.
Client assets are held in Separately Managed Accounts (SMAs) with third-party VASPs (e.g., Binance, OKX, Bybit).
- VASP Insolvency: Algotoria is not liable for losses arising from the insolvency, acts, or omissions of any third-party exchange.
- Regulatory Intervention: Actions by competent authorities against a VASP may make it impossible for Algotoria to fulfill its management obligations or for the client to access assets.
- Stablecoin Depegging and Issuer Risk: The strategies managed by Algotoria may involve holding up to 100% of the portfolio assets in stablecoins, specifically USDT or USDC, to serve as primary collateral or liquidity. These instruments are subject to "depegging" risk, where the stablecoin may lose its 1:1 value parity with the underlying fiat currency. Such a loss of peg can occur due to issuer insolvency, loss of underlying reserves, regulatory interventions, or technical failures in the coin’s smart contract. In the event of an issuer default or a restriction on circulation, the market value of these assets may collapse, leading to a total loss of the capital held in these instruments regardless of the performance of the underlying trading algorithms.
The strategies are 100% systematic and automated.
- Model Limitations: Strategy parameters are based on historical data. Future market regimes may differ significantly from the past, rendering the models less effective.
- Algorithm Malfunction: Automated systems may fail to function as intended due to malfunctions in execution signals or smart contract logic.
- Jurisdictional Restrictions: Participation is prohibited for residents or entities in "Restricted States".
- Professional Investor Requirement: These services are strictly for "professional investors" as defined under the laws of the British Virgin Islands and the client's local jurisdiction.
- Tax Responsibility: Clients bear sole responsibility for all tax liabilities and reporting requirements arising from trading activity.
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