Hedging in Stoic AI keeps a portion of your portfolio safely in your strategy's base currency (e.g., USDT or USDC) and out of active trading. This serves as a safety buffer during uncertain market conditions.
Figure 1: The SET YOUR HEDGE configuration modal in the Stoic AI app.
⚙️ Hedging Options
Inside the SET YOUR HEDGE window, you can choose between two main modes:
1. Auto Hedge (Stoic AI's dynamic hedge)
Stoic AI automatically evaluates market conditions and dynamically decides when to hedge and by how much. This option is best if you prefer full algorithmic risk management without manual intervention.
2. Manual Hedge (your choice)
Manually select the exact percentage of your portfolio to hold out of active trading:
0% — Stoic AI manages your entire balance.
25% / 50% / 75% — The selected portion is held in stablecoins to reduce drawdown exposure.
100% — Trading pauses entirely and all funds are kept in the base currency.
📌 Rules & Limits
Monthly Changes Limit: You have 5 hedge adjustments available per month. Please plan your adjustments carefully.
Strategy Base Currency: Hedged funds stay safely on your exchange account stored in your strategy's base currency.
Execution Time: After clicking Confirm, the algorithm will reallocate your exchange funds during the next scheduled trading cycle.
❓ Frequently Asked Questions (FAQ)
Q: Does switching back to Auto Hedge count towards my monthly limit? A: Yes. Any confirmed change between Auto Hedge and Manual Hedge (or changing Manual Hedge steps) uses 1 of your 5 monthly available changes.
Q: What happens if I select 100% Manual Hedge? A: Stoic AI liquidates active trading positions into stablecoins and completely pauses trading until you lower the hedge or switch back to Auto Hedge.
Q: Does Stoic withdraw my hedged funds? A: No. All hedged funds remain strictly on your connected exchange account.