Derivatives & Risk

What is the maximum drawdown of a portfolio?

Maximum drawdown is the largest peak-to-trough decline a portfolio has experienced before recovering, expressed as a percentage of the peak value. It measures the worst loss an investor would have endured holding through that stretch. For example, a portfolio that fell from 100 to 60 before recovering has a 40% maximum drawdown. Unlike volatility, it captures the depth of pain rather than the average wobble, which makes it useful for judging whether a strategy is survivable. Reviewing drawdown alongside returns is part of reading performance honestly, the standard Qatobit's research-led methodology applies.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.