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Mindforge LogoMINDFORGE INTELLIGENCE
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MINDFORGE INTELLIGENCE
Market Risk Classifier

THE CALM
DIVIDEND

[ Hedging Cost Optimization ]

SYSTEM CONTEXT
Market Risk Classifier (MRC) : Daily regime classification. Delivered pre-market. Research tool, not trading signal.
STABLE : Default state. Benign conditions, low implied volatility. Historically 87% of trading days.
CORE FINDING

The market was STABLE 87% of the time.

If you hedged like it wasn't, you overpaid.

Backtest window: 1990-2025 + 2025 OOS • Median VIX (STABLE): ~14 • Research use only. Not investment advice. Mindforge is not a registered investment adviser. mindforge.tech/terms | mindforge.tech/validation-and-methods

FOR INSTITUTIONAL RESEARCH ONLY • MINDFORGE.TECH

PROOFTHE SAVINGS PROOF
savings-proof
STABLE is expensive if you hedge like it isn't.
Model
Budget-weighted hedge allocation: 50% spend during STABLE, 150% during ELEVATED or higher vs. static always-on hedging
Assumed budget
100 bps/yr (illustrative mid-range hedge budget)
Savings math
Savings rate = STABLE share − 50% = 87.4% − 50% = 37.4%. At 100 bps hedge budget → 37.4 bps/yr saved
savings-proof-print
STABLE is expensive if you hedge like it isn't.
Model
Budget-weighted hedge allocation: 50% spend during STABLE, 150% during ELEVATED or higher vs. static always-on hedging
Assumed budget
100 bps/yr (illustrative mid-range hedge budget)
Savings math
Savings rate = STABLE share − 50% = 87.4% − 50% = 37.4%. At 100 bps hedge budget → 37.4 bps/yr saved
Research use only. Not investment advice. Past performance ≠ future results. Mindforge is not a registered investment adviser. Full terms: mindforge.tech/terms | mindforge.tech/validation-and-methods
PROOFTHE CONFIDENCE PROOF
confidence-proof
After a spike, baselines wait. MRC timestamps re-entry.
The problem
After volatility spikes, arbitrary waiting rules ("wait 10 days after VIX peak") leave money on the table
MRC solution
STABLE classification signals when conditions have normalized. No arbitrary countdown.
The delta
SPX move captured between MRC re-entry and baseline re-entry = participation window you'd otherwise miss
confidence-proof-print
After a spike, baselines wait. MRC timestamps re-entry.
The problem
After volatility spikes, arbitrary waiting rules ("wait 10 days after VIX peak") leave money on the table
MRC solution
STABLE classification signals when conditions have normalized. No arbitrary countdown.
The delta
SPX move captured between MRC re-entry and baseline re-entry = participation window you'd otherwise miss
Research use only. Not investment advice. Past performance ≠ future results. Mindforge is not a registered investment adviser. Full terms: mindforge.tech/terms | mindforge.tech/validation-and-methods
PROOFTHE STABILITY PROOF
stability-proof
STABLE lasts. That's why it saves money.
The point
STABLE isn't noise. It's a sustained regime. Median streaks last long enough to reduce hedge spend meaningfully.
Typical conditions
Median VIX: ~14 • Median 10-day SPX return: +0.7%
2025 validation
Out-of-sample stability confirms the pattern persists. Not just a historical artifact.
stability-proof-print
STABLE lasts. That's why it saves money.
The point
STABLE isn't noise. It's a sustained regime. Median streaks last long enough to reduce hedge spend meaningfully.
Typical conditions
Median VIX: ~14 • Median 10-day SPX return: +0.7%
2025 validation
Out-of-sample stability confirms the pattern persists. Not just a historical artifact.
Research use only. Not investment advice. Past performance ≠ future results. Mindforge is not a registered investment adviser. Full terms: mindforge.tech/terms | mindforge.tech/validation-and-methods
PROOFTHE REAL RISK: FALSE STABLE (COVID 2020)
false-calm
Assuming STABLE during CRISIS is the catastrophe.
MRC timestamp
CRISIS classification
Delta
VIX expansion shown (Feb 24 → Mar 16)
Purpose
Show catastrophic cost of misclassification
Historical note
MRC has never classified STABLE during a CRISIS episode (1990-2025 backtest).
false-calm-print
Assuming STABLE during CRISIS is the catastrophe.
MRC timestamp
CRISIS classification
Delta
VIX expansion shown (Feb 24 → Mar 16)
Purpose
Show catastrophic cost of misclassification
Historical note
MRC has never classified STABLE during a CRISIS episode (1990-2025 backtest).
Research use only. Not investment advice. Past performance ≠ future results. Mindforge is not a registered investment adviser. Full terms: mindforge.tech/terms | mindforge.tech/validation-and-methods
PROOFCOST-NEUTRAL DEPLOYMENT
cost-neutral-model
The arithmetic works at scale.
MRC Subscription
$48,000/year (early adopter pricing, subject to change)
Illustrative scenario
$500M AUM • 100 bps hedge budget
Savings rate
37.4% of hedge budget
How the 37.4% baseline is derived
Savings rate = STABLE share − 50%. STABLE share (1990-2025) = 87.4% → 87.4% − 50.0% = 37.4%
Annual savings (illustrative)
$1.870M/year
Net benefit (illustrative)
$1.822M/year (39.0x gross ROI vs subscription)
Adoption note
Assumes full adoption. Partial compliance retains proportional savings.
cost-neutral-model-print
The arithmetic works at scale.
MRC Subscription
$48,000/year (early adopter pricing, subject to change)
Illustrative scenario
$500M AUM • 100 bps hedge budget
Savings rate
37.4% of hedge budget
How the 37.4% baseline is derived
Savings rate = STABLE share − 50%. STABLE share (1990-2025) = 87.4% → 87.4% − 50.0% = 37.4%
Annual savings (illustrative)
$1.870M/year
Net benefit (illustrative)
$1.822M/year (39.0x gross ROI vs subscription)
Adoption note
Assumes full adoption. Partial compliance retains proportional savings.
Research use only. Not investment advice. Past performance ≠ future results. Mindforge is not a registered investment adviser. Full terms: mindforge.tech/terms | mindforge.tech/validation-and-methods
COMPARISONTHE MODEL
WITH MRC
✓ Classify STABLE (~70% of days) → reduce hedge notional
✓ Timestamp re-entry after volatility spikes
✓ Maintain full hedge when ELEVATED/CRISIS active
WITHOUT MRC
✗ Hedge every day at baseline
✗ Over-hedge during STABLE regimes
✗ Pay premium drag in low-vol periods
✗ Miss re-entry timing after spikes
Research use only. Not investment advice. Past performance ≠ future results. Mindforge is not a registered investment adviser. Full terms: mindforge.tech/terms | mindforge.tech/validation-and-methods
MRC provides regime classification. Sizing decisions remain with portfolio management and risk governance.
ACCESSPILOT

VERIFY IT LIVE

60 Days. Full Access.

INCLUDES
  • • Daily classification via email or API
  • • 5+ year historical classification access
QUALIFICATION

Institutional 60-day pilot for qualified research teams.

RESTRICTED TO INSTITUTIONAL USE
STABLE + CRISIS
This brief: how MRC-informed sizing reduces hedge costs during STABLE.
To see how MRC timestamps regime shifts pre-market, see The Crisis Classification Brief.
PHONE

+1 (646) 847-9889

EMAIL

research@mindforge.tech

Research use only. Not investment advice. Past performance ≠ future results. Mindforge is not a registered investment adviser.
mindforge.tech/terms | mindforge.tech/validation-and-methods

Ready to evaluate MRC for your risk process?

Begin a 60-day pilot. 60-day license term with 30 days extended access. Full production feed, historical archive, and institutional documentation. Pilot fee credited against annual subscription upon conversion.

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Research use only • Not investment advice • Past performance ≠ future results • Full terms

Research use only. Not investment advice. Past performance ≠ future results. Mindforge is not a registered investment adviser. Full terms · Methods