Hermes reaches its −30% stop.
A drawdown that built progressively from late January reached the Hermes strategy’s predefined 30% maximum-loss threshold. All remaining positions have been closed and the strategy is paused for a seven-day structured review. What happened, why, and what comes next — with the full stakeholder update linked below.
What happened
On 22 June, the Hermes strategy closed all remaining open positions after its cumulative drawdown reached the strategy’s predefined maximum-loss threshold of 30%. It is important to separate the timing of the closures from the timing of the loss: the drawdown was not incurred in a single session. It accumulated progressively from late January 2026 onward, with a substantial portion already reflected in unrealized P&L before today. The final executions simply crystallized the remaining unrealized losses and reduced the portfolio’s market exposure to zero.
The loss was less about the final direction of any single market than about the sequence of sharp extensions, reversals and shifting correlations between instruments. As the largest exposures came under pressure at the same time, the diversification between subsystems weakened. The 30% control then did exactly what it was designed to do — cap the loss and remove all exposure.
The market environment
The drawdown developed during an unusually unstable period for FX and precious metals. Gold reached a record high near $5,595 on 29 January, reversed violently in the same session and fell 9.5% the next day; by mid-June it sat roughly 25% below its January peak. The Australian dollar strengthened materially — AUD/CAD and AUD/NZD rose approximately 4.7% and 5.5% between 27 January and 22 June — while hawkish repricing of Fed expectations pushed the dollar index to a one-year high and pressured both sterling and gold.
The largest negative contributions came from positions in GBP/USD, AUD/CAD, AUD/NZD and XAU/USD. Commodity currencies stopped behaving as a single risk group, and as several subsystems came under pressure concurrently, losses accumulated over successive holding cycles.
What we’re doing
Once the 30% threshold was reached, portfolio-level risk control directed the closure of all remaining positions and no new positions will be opened during the suspension. Hermes now pauses for seven calendar days. During that window, the data gathered through the incident is being incorporated into an adjusted infrastructure — with a focus on dynamic correlation assessment, subsystem concentration controls, allocation constraints, regime filtering and earlier portfolio-level de-risking when losses begin to correlate. After the pause, Hermes restarts on the adjusted infrastructure. The priority at restart is controlled risk deployment and resilience — not the rapid recovery of previous losses.
A note for clients
The 30% threshold was reached on the Hermes signal account. Because client accounts copy this signal, each client’s actual loss depends on their own account and copy start date. Clients who joined earlier broadly track the signal’s full drawdown to the 30% stop; those who joined more recently — after part of the decline had already taken place — may have experienced a different, and in many cases smaller, loss. Please refer to your broker statements for definitive figures.
Read the full update
The complete stakeholder update — market environment, risk action and disclosures — is available in English and Czech.