What is Project Daedalus and Project A.T.L.A.S.?
A little history lesson first, Daedalus was Icarus’ father. For those of you who aren’t brushed up on their ancient myths...
Daedalus and Icarus where trapped on the island of Crete in the Labyrinth (a creation of the master craftsman Daedalus) Daedalus created a pair of wings for himself and Icarus out of feathers and wax. Daedalus warned his son not to fly too close to the sun but he flew too high anyway and once the wings melted he fell into the ocean and drowned.
With our Project Daedalus we have implemented a Hedging strategy to stop us flying too close to the sun. This applies to not only our Cryptocurrencies but also our holdings in US Equities and Indices. It is very much there as a safety net! Hope for the best, prepare for the worse!
Each instrument is individually analyzed on a daily and sometimes even hourly basis and then SHORT trades are either set via orders or opened live. The allocation is dependent on a few things such as current long exposure and the ratio of potential drawdown vs potential gains.
By using this method we have limited our drawdown and rebalanced the portfolio so that the wild swings in Cryptocurrencies aren’t as destructive.
Once again into mythology we go, Atlas was the titan that lead the war against the other Greek gods. Once the war was over as punishment he was sent by Zeus to hold up the edge of heaven from falling to Earth.
Altas covers our ‘Holding’ trades, because they are being hedged by Daedalus the drawdown from them is no where near as bad as it would have been. Altas also holds some of our long term equity trades as well that wont really be going anywhere in the near future as they are on a longer recovery cycle or have a very handsome dividend pay out.
By actively running two differing and complimentary strategies we have seen our drawdown be reduced and have even locked in some healthy profits with our short trade, while at the same time left the door open for us to trades on the volatility of the US Equity market that has come back in force.