At Southwest Managed Investments risk management is giving high priority. If at all possible within existing market conditions, Southwest Managed Investment's trading system performs under the constraints of its risk management system. In the Global Diversified Program the risk management system helps eliminate the amount of risk in each market, group of related markets, and for the overall portfolio.
Risk is calculated daily for each model on all open positions. Each open position has an adverse reaction price point at which Southwest Managed Investments exits the position immediately. Within the model, various other techniques and filters are used to control risk in related markets and in the portfolio as a whole. Southwest Managed Investments employs an additional overriding filter to prevent initiating a position when the level of risk in the initiated position is at an abnormally high level.