Risk Management
Risk Controls
Drake implements multi-layered risk management.
Margin Requirements
Pre-Trade Checks:
Minimum margin ratio to open positions (~150%)
Sufficient collateral verification
Position size limits
Pre-Withdrawal Checks:
Minimum margin ratio after withdrawal (~150%)
Remaining collateral adequacy
Ongoing Monitoring:
Real-time margin ratio calculation
Liquidation threshold monitoring (~100%)
Automated liquidation triggers
Open Interest Limits
Per-Asset Caps: Maximum open interest per instrument as percentage of vault assets.
Imbalance Limits: Maximum difference between long and short open interest.
Limits enforced via OIAndPnLManager on position opens and increases.
Price Bands
Each instrument has minimum and maximum order prices (typically ±10% from current price). Orders outside bands rejected.
Dynamic Spreads
SpreadManager adjusts AMM spreads based on:
Market volatility
Vault utilization
Open interest imbalance
Liquidity conditions
Spread ranges:
Normal: 0.02-0.05%
High volatility: 0.10-0.20%
Emergency: 0.50%+
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