Hedging in Stoic AI is an automated risk management tool designed to keep a portion of your portfolio in stablecoins (USDT/USDC) to protect your assets during severe market downturns (learn more at đ stoic.ai).
How Hedging Works
Manual Hedging: Depending on your strategy, you can set a custom target hedging percentage in your portfolio settings.
Dynamic Hedging: Stoicâs algorithm automatically adjusts the protection level in real time based on market volatility and trend shifts, removing the need for manual intervention.
â ď¸ Important Notes for Smaller Balances
If your account balance is close to the strategy minimum ($500â$1,000 depending on the exchange), you may observe specific behaviors:
Exchange Minimum Order Limits: Crypto exchanges enforce a minimum trade size. On smaller portfolios, the algorithm cannot split small balances into dozens of tiny positions, forcing the remaining fraction to stay in USDT.
Actual Hedge Higher Than Target: If you set a 0% hedge but still see stablecoins in your portfolio, it means the remaining balance is below the minimum order size required by the exchange to open additional altcoin positions.
âąď¸ Execution Timeline
When you manually adjust your hedging level, the algorithm requires time to recalculate allocations and execute orders. The deployment process typically takes 24 to 48 hours to fully reflect in your exchange account.
â Frequently Asked Questions (FAQ)
Q: Why is my portfolio not 100% invested even though my hedge is set to 0%? A: This is usually due to exchange-side minimum order requirements. On smaller account balances, unallocated funds stay in USDT to prevent trade execution errors.
Q: How long does it take for hedge changes to take effect? A: Adjustments take up to 48 hours to fully deploy, as trades are executed during scheduled portfolio rebalancing cycles.