Risk Flags

The flags array in the response identifies specific risk conditions detected for the trade. Use flags to understand why a score is elevated and to make targeted decisions in your agent logic.

Flag Reference

Order Book Flags

Flag	Severity	Description
thin_book	Warning	Limited liquidity in the order book for this trade size
high_slippage	Warning	Expected slippage exceeds normal thresholds
extreme_slippage	Critical	Slippage would significantly degrade execution quality

Liquidation Flags

Flag	Severity	Description
near_liquidation	Critical	Position would be close to liquidation price
near_backstop	Critical	Position is near the backstop liquidation threshold
high_leverage	Warning	Effective leverage is elevated relative to the asset's risk profile

Funding Flags

Flag	Severity	Description
funding_anomaly	Warning	Funding rate is statistically abnormal (z-score > 3)
funding_expensive	Warning	Projected annualized funding cost is high
cex_funding_divergence	Warning	Significant gap between Hyperliquid and CEX funding rates

Market Impact Flags

Flag	Severity	Description
high_impact	Warning	Trade would meaningfully move the market price
low_volume	Warning	Recent trading volume is low for this asset

VaR Flags

Flag	Severity	Description
high_var	Warning	24-hour Value-at-Risk is elevated
limited_history	Info	Insufficient historical data for full statistical analysis
new_listing	Info	Recently listed asset with limited trading history

Open Interest Flags

Flag	Severity	Description
oi_at_cap	Critical	Asset is at the exchange's open interest cap
oi_near_cap	Warning	Open interest is above 80% of estimated cap

Portfolio Flags

Flag	Severity	Description
concentration_risk	Warning	Over 50% of portfolio value in a single asset
correlated_exposure	Warning	Multiple positions with high correlation in the same direction

Using Flags in Agent Logic

Flags let you build nuanced responses beyond just checking recommendation:

result = canon.validate(...)

# Block on critical flags
critical = [f for f in result.flags if f in ["extreme_slippage", "near_liquidation", "oi_at_cap"]]
if critical:
    agent.abort(f"Critical risk: {critical}")

# Adjust for warnings
if "thin_book" in result.flags:
    # Reduce size to match available liquidity
    size = min(size, result.slippage.depth_at_50bps * 0.5)

if "funding_expensive" in result.flags:
    # Only enter if expected alpha exceeds funding cost
    if expected_return < result.funding.annualized_pct:
        agent.skip("Funding cost exceeds expected return")

if "correlated_exposure" in result.flags:
    # Already exposed to this direction, reduce allocation
    size *= 0.5