During periods of high market volatility or market downturns, the most effective way to protect your capital is portfolio hedging. In the crypto market, the simplest and safest way to hedge is by temporarily shifting a portion of funds into stablecoins (USDT or USDC).
Learn more about risk-management algorithms at đ stoic.ai.
How Hedging Works in Stoic
The Stoic app provides two main ways to manage your portfolio's risk level:
Automated (Algorithmic) Hedging You can let Stoic manage risks automatically. The algorithm constantly analyzes market indicators and trends: when a severe draw-down is likely, it automatically converts part of the portfolio into stablecoins, switching back to crypto assets when market conditions improve.
Manual Hedging If you prefer to manage market exposure according to your own outlook, you can set a custom hedge percentage in the app settings. Based on your selection, Stoic will hold that specific percentage in stablecoins and keep it untouched during regular trades.
â Frequently Asked Questions (FAQ)
Q: Do I have to configure the hedging percentage manually? A: No. By default, Stoic algorithms evaluate market risks and handle hedging automatically. You can completely ignore the manual hedging settings if you prefer automated risk management.
Q: Will Stoic buy crypto back when the market recovers? A: Yes. Under automated strategies, as soon as market indicators signal a bullish trend, Stoic reallocates funds from stablecoins back into active trading positions.
Q: Are hedged funds withdrawn from my exchange account? A: No. All hedged assets remain safely on your exchange account stored in stablecoins (USDT/USDC).