Traders are strictly prohibited from engaging in abrupt, excessive, or disproportionate scaling of lot sizes that significantly elevate the risk profile of their Account. Excessive scaling refers to instances where the lot size of a position in the same or a correlated instrument is increased rapidly compared to the most recently executed position within a 24-hour rolling period - unless such scaling results in either reduced or unchanged aggregate exposure and margin utilization.
To maintain controlled risk exposure, the following guidelines are enforced:
1. Intra-Day Scaling Restriction
During a single trading session, increases in lot size excessively for the same or correlated instruments are not allowed.
2. Time-Based Scaling Restriction
Any lot size increase which is rapidly increased requires a minimum of 24 hours between the closure of the prior position and the initiation of the larger position.
3. Margin Constraints
Scaling activity must not result in:
- Total margin utilization surpassing 10% of the available margin; or
- Margin utilization exceeding 5% for any single High-Risk Instrument.
4. Exposure Concentration Safeguards
Scaling actions leading to:
- Notional exposure to a single High-Risk Instrument that exceeds 25% of the Account's balance or equity; or
- Directional exposure surpassing predefined concentration limits, will be categorized as excessive regardless of adherence to lot-size ratios.
Scaling practices are evaluated holistically and in real time, factoring in open positions, pending orders, partially hedged trades, and offsetting positions. This assessment is independent of considerations such as stop-loss usage, trade duration, execution speed, profitability, or intent.
Violations of this policy represent a breach of Kudo Funded’s risk management standards. Kudo Funded reserves absolute discretion to take action without prior notice, including reducing or closing positions, voiding trades, removing profits derived from violations, restricting trading activity, or terminating the Account. Decisions will be determined using Kudo Funded’s internal risk assessment systems and are final and binding in all instances.