Case Study

From Speculative Drawdown to Systematic Growth

The Challenge: Recovering from Unmanaged Volatility

A High-Net-Worth Individual (HNWI) approached MVK Alpha Capital after experiencing a 10% sudden drawdown due to unhedged, discretionary options trades. The client faced a dual challenge:

  1. The "Revenge Trading" Trap: A desire to "make back" the losses quickly, which often leads to even higher risk and potential ruin.

  2. Lack of Framework: No systematic method for asset allocation, leaving the capital vulnerable to emotional decision-making and market shocks.

The objective was to recover the lost capital through a disciplined framework that prioritized consistency and downside protection over speculative "bets."

The Solution: Deploying Numericon Balanced

MVK Alpha Capital implemented the Numericon Balanced model—a multi-asset, quantitative framework designed for stable compounding.

The Strategic Composition:

We re-architected the client's capital into five uncorrelated "engines":

  • Equities (US Indexes): For long-term growth participation.

  • Gold: To serve as a non-correlated inflation hedge and safe-haven asset.

  • Short-Term Bonds: To provide a liquid cash buffer and yield.

  • Crypto (Trend-Following): A controlled allocation to capture high-velocity momentum moves.

  • The Tail-Risk Overlay: A dedicated convex protection layer designed to profit specifically during the "Black Swan" events that previously decimated the client's account.

The Quantitative Strategy: The VaR Defense

Instead of the "all-in" approach of the client's previous options trades, we applied a Value at Risk (VaR) overlay.

  • Logic-Driven Allocation.

  • Emotional Shield.

The Results: Recovery & Resiliency

By shifting from "Bad Options Trades" to the Numericon Balanced framework, the client achieved:

  • Drawdown Mitigation.

  • Consistent Growth,

  • Lower Beta.

Strategic Advisory: Is Your Capital At Risk?

Speculative losses are often a symptom of a missing framework. If you are looking to move from discretionary trading to a systematic wealth strategy, our Portfolio Audit can help you identify your vulnerabilities.