ROCKWELL PALISADE GLOBAL
New York | London | Hong Kong
Systematic Research & Execution
RISK MANAGEMENT FRAMEWORK
Document Reference: RP-RSK-09 (Proprietary)
Rule number one around here is: Don't lose money. Rule number two is: Don't forget rule number one. Before we try to make a dime for the firm, we make absolutely sure we aren't going to lose the farm.
People tend to get emotional when the market gets scary. Computers don't. We let the machines handle the risk because they don't care if the sky is falling—they just look at the math. Our framework is entirely systematic, watching for trouble every millisecond of the day.
We have a decentralized risk system that operates entirely on its own. If one of our models starts acting a bit too big for its britches, or the market goes completely crazy, this brake pulls itself. It flattens our positions and turns everything to cash before any real damage is done. No committees, no phone calls—it just shuts it down.
We stress-test our portfolios daily against historical "black swan" events (e.g., the 1987 crash, the 2010 Flash Crash, COVID-19 volatility) to ensure that the firm remains structurally sound even in the event of cascading systemic liquidity failures.