Cross-Venue Safety

The hidden risk of “diversifying” venues

Trading across multiple exchanges can reduce counterparty risk, but it can increase exposure risk if you size each leg in isolation. Cross-venue safety is about controlling total risk while you chase best price or redundancy.

A quick sizing model for multiple venues

1. Set a portfolio-level cap: e.g., 1% of account per idea, regardless of venue count.
2. Allocate by liquidity quality: Heavier weight to the venue with tighter spreads/deeper book.
3. Respect per-venue caps: No single venue holds more than 60–70% of the idea.
4. Mirror the stop: Same SL/TP levels across venues; avoid mismatched exits.
5. Match leverage assumptions: If one venue uses higher leverage, size it smaller so risk stays constant.

Example: If your idea risk is 1% and you’re splitting between Venue A (deep) and Venue B (thinner), go 0.7% risk on A, 0.3% on B. The total stays 1%.

Why this matters

• Hidden leverage: Doubling the same idea across venues doubles risk, not edge.
• Volatility gaps: Thin venues can slip stops further; smaller allocation protects you.
• Operational breaks: If one venue pauses, the other leg’s stop still exists and is sized sanely.
• Funding drag: A thinner venue might have higher funding; smaller size keeps cost in check.

Execution checklist before you split

• Are spreads stable? If one venue widens, shrink its slice.
• Is funding skewed? On perps, adjust for higher funding on the thinner venue.
• Are stops synchronized? Place SL/TP per leg immediately; avoid naked legs.
• Is correlation obvious? Same asset on two venues = one idea. Size it once.
• Is latency clean? If a venue is laggy, either cut size there or avoid.

How Swipe cards help here

• Unified risk view: Card risk % is per idea; when you split, keep the sum equal to that %.
• Protected by default: Stops/targets travel with each leg when routed.
• TTL control: Stale opportunities auto-expire, so you’re not managing ghost legs.
• Receipts per leg: Each leg keeps its own audit trail for review.

Simple rules to avoid overexposure

• Max 1 open idea per asset per timeframe unless hedged.
• Cap stacked perps: If you’re long BTC perps on two venues, total notional = your one-idea cap.
• When in doubt, shrink: If a venue feels off (latency, errors), cut its share or skip it.
• Don’t stack same-side alt betas: BTC + ETH + SOL all long across venues = one macro trade.
• Respect daily/drawdown brakes: If you’re near the brake, no splits—close to flat or pass.

Troubleshooting scenarios

• One venue halts: Keep calm; the other leg still has a stop. Flatten remaining size; avoid adding.
• Stops filled unevenly: Accept asymmetry; don’t chase rebalancing if spreads are wide.
• Funding spikes on one venue: Reduce that leg or close it; keep main risk on cheaper venue.
• Latency spikes: Pause new splits; route to the fastest venue only with smaller size.

Review template (weekly, 10 minutes)

1. Count split trades vs. single-venue trades.
2. Check slippage by venue; cut allocation to the worst offender.
3. Compare funding costs; avoid chronic high-cost venues for size.
4. List any stop mismatches; adjust your synchronization habit.
5. Rewrite your per-venue cap rule if one venue keeps slipping.

FAQs

• Can I offset fees by splitting? Only if spreads/liquidity justify it. Fees saved are pointless if slippage grows.
• What if one stop slips more? That’s expected on thin books—that’s why its risk slice is smaller.
• Should I hedge across venues? If you’re hedging (e.g., long perps, short futures), treat it as one structured position with its own risk cap.
• What about mobile swipes? Same rule: total risk stays at idea cap; split sizes in advance.
• Can I keep adding legs? If you add, you must reduce elsewhere to hold the total risk constant.

The takeaway

Cross-venue routing is powerful when it reduces risk, not when it silently doubles it. Set a total risk cap per idea, split by liquidity quality, and keep every leg protected. That’s cross-venue safety in one paragraph.