Model and Regime Risk

Status Draft briefPart Risk and Operations

A model can fail because parameters drift, mechanisms change, inputs break, or its abstraction was never valid at the scale being used.

Central questions

• Which observable conditions define the model’s operating domain?
• What detects drift or structural change soon enough to act?
• Which fallback remains safe when confidence collapses?

Planned model

Shift volatility, order flow, fees, tick size, latency, and participant behavior while comparing static calibration, adaptive estimates, guardrails, and shutdown.