How does Composer measure risk?

Within the Discover page of pre-existing symphonies crafted and made available by Composer, users will find symphony risk categories associated with each pre-existing symphony. Composer classifies each risk category in three ways: conservative, moderate, and aggressive.

These categories are designed to give potential traders high-level insights into pre-existing symphonies and their historical backtest results relative to market conditions. Please note, the ultimate arbiter of the risk associated with pre-existing symphonies shall be placed on the user or potential trading account owner.

Risk categories are evaluated based on standard deviation, beta when benchmarked against SPY, and whether or not the pre-existing symphony contains assets that are considered leveraged ETFs.

Additional questions about risk categories can be submitted to Feedback or suggestions about risk categories can be submitted through our feedback form here.

Exchange Traded Funds

By choosing to trade pre-existing symphonies containing ETF products, you understand the associated risks of trading and holding ETFs, and costs associated with ETFs. Furthermore, you understand these risks as they pertain to leveraged ETFs. All investors should be familiar with the risks of ETFs prior to deploying a Composer Symphony that contains ETF products. 

Generally, exchange-traded funds (“ETFs”) are a type of index fund bought and sold on a securities exchange. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although lack of liquidity in an ETF could result in it being more volatile and ETFs have management fees that increase their costs. ETFs are also subject to other risks, including, but not limited to: (i) the risk that their prices may not correlate perfectly with changes in the underlying index; (ii) the risk of possible trading halts due to market conditions or other reasons that, in the view of the exchange upon which an ETF trades, would make trading in the ETF inadvisable; (iii) the risk of the ETF being liquidated.

Before investing in ANY strategy containing an ETF, please review the prospectus of each ETF contained within the pre-existing symphonies for which you have selected for investment. If you cannot locate a prospectus, please contact your broker and request the prospectus, before proceeding with your investment.

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