Darwinex has unveiled a new improvement in the Darwinex platform, crucial to provide greater transparency and build more confidence in its investment asset, the DARWIN.
Starting today DARWIN quotes will be calculated based on investors’ execution prices instead of the trader’s signal account execution prices, as they have been previously. It is important to note that the profitability of the investors does not change.
Darwinex has dedicated over a year to develop this product improvement due to its technical complexity (important implications on the platform, challenges in testing it in a simulated environment, etc.).
Since September 2023, all DARWINs that did not have investment have already been quoting using the new calculation method and Darwinex has verified that the changes have worked correctly in a real environment.
From now on, all DARWINs with less than $100,000 of investment also transition to quoting with the new format. In other words, 95% of DARWINs are now quoting using the new calculation method.
Once Darwinex has thoroughly tested the functionality on these DARWINs with lower investment, Darwinex plans to implement the change for the remaining DARWINs on the platform, most likely between January and February 2024.
1. If you are a DARWIN provider (trader):
- In the DARWIN section, you will be able to access the same information you had until now.
- Once all DARWINs are being quoted without slippage, the divergence restriction currently imposed in DarwinIA will no longer be used. All DARWINs, except those closed to investment, will then participate in DarwinIA (however, note that the current restrictions based on correlation and minimum equity in the signal account will be maintained).
- The returns used for the rating calculation in DarwinIA SILVER and the monthly return in DarwinIA GOLD will be calculated using the new DARWIN quoting method. Therefore, if a DARWIN is experiencing slippage issues, they will be reflected in its returns but it will still participate in DarwinIA.
- The DARWIN index now depends on the execution quality of the investors, adding another source of differentiation to the signal account’s return curve. It is a “minor negative consequence” for the DARWIN provider, offset by providing greater transparency to the investor.
- In the event that Darwinex decides to compensate investors for an execution problem, it will proceed to recalculate the DARWIN quote the following weekend to show the compensation made to investors.
2. If you are an investor:
- The concept of divergence disappears from the DARWIN page, and Darwinex replaces it with the concept of “used capacity.” Used capacity is a value between 0% and 100%, indicating an estimate of the amount of investment a DARWIN can have before closing due to excessive slippage.
- It is calculated based on its existing slippage divergence, calculated to date, and the divergence at which Darwinex closes the DARWIN to new investment due to slippage making it very difficult for investors to continue generating positive returns in the future.
- A DARWIN will be open to new investment as long as the used capacity value is not 100%. Once it reaches 100%, it will be closed to further investment until the used capacity value drops back to 95%.
Used capacity will be displayed using a bar with the following colors depending on the value:
- Green (0 to 69.99%) – DARWIN Open
- Orange (69.99% to 99.99%) – DARWIN nearing closure
- Red (100%) → DARWIN Closed
The DARWIN’s quote curve will start quoting with investors’ execution prices, making it much easier to assess the impact of slippage on the DARWIN’s performance.
For each DARWIN, Darwinex will display the date from which its quoting began to be calculated with the new system.
