Paradex Risk Guardian

Paradex Risk Guardian

Synthesizes data from multiple Paradex MCP tools into a unified risk picture. Answers the question: "Am I safe?" with specific numbers and actionable recommendations.

Available MCP Tools (data sources)

| Tool | Risk data it provides | |---|---| | paradex_vault_account_summary | Margin usage, total equity, maintenance margin, available balance | | paradex_vault_positions | Open positions, unrealized PnL, entry prices, sizes | | paradex_vault_balance | Cash available for new positions | | paradex_market_summaries | Current prices, 24h changes, funding rates, volatility context | | paradex_markets | Position limits, margin params, price bands width | | paradex_bbo | Current prices for mark-to-market | | paradex_funding_data | Funding cost/income over time | | paradex_orderbook | Liquidity available for exit |

Risk Assessment Framework

1. Account Health Check

Pull paradex_vault_account_summary and compute:

• Margin utilization: usedmargin / totalequity × 100%
• 90%: Danger — liquidation risk (red)

• Free margin: totalequity - usedmargin — how much capacity for new positions

• Liquidation buffer: estimate distance to liquidation as a percentage price move

> For the full per-position IMR/MMR breakdown and cross-margin vs. portfolio-margin > methodology detail, use paradex-pm-analyzer. Risk Guardian gives a health summary; > pm-analyzer gives the underlying margin math.

• For each position: how much can the market move against you before maintenance margin is breached?
• Report the tightest (most dangerous) position
• When a specific position is queried (e.g., "how close am I to liquidation on my BTC?"),

focus the liquidation analysis on that position only. Estimate the dollar P&L loss if it were liquidated at the estimated liquidation price: (entry_price − liq_price) × size for longs, (liq_price − entry_price) × size for shorts. Do not include liquidation details for other positions unless the user asks for a comparison or full portfolio view.

2. Position Analysis

Pull paradex_vault_positions and analyze:

Concentration risk:

• Calculate notional value of each position
• Compute percentage of total exposure per market
• Flag if any single position is >40% of total exposure
• Flag if top 2 positions are >70% of total exposure

Directional bias:

• Sum net delta across all positions
• Report as: "Net long $X notional" or "Net short $X notional"
• Compare net exposure to account equity for effective leverage

Unrealized P&L:

• Total unrealized P&L across all positions
• Unrealized P&L as percentage of equity
• Identify worst-performing position (biggest drag)
• Identify best-performing position

3. Funding Cost Analysis

For each open position, estimate funding cost:

1. Get current funding rate from paradex_market_summaries
2. Calculate 24h funding cost: positionnotional × fundingrate × (24 / fundingperiodhours)
3. Annualize: daily_cost × 365
4. Sum across all positions for total portfolio funding cost/income

Report:

• Total daily funding cost/income
• Per-position funding breakdown
• Flag positions where funding is >0.1% daily (costly to hold)

4. Liquidity Risk

For each position, check exit liquidity via paradex_orderbook:

• Can the full position be exited within 1% slippage?
• What percentage of the position could be exited at current depth?
• Flag illiquid positions where orderbook depth 90% |

| Position concentration | 20% | No position >25% | Single position >60% | | Effective leverage | 20% | 10x | | Funding cost (daily) | 15% | Net positive | >0.2% of equity | | Liquidity risk | 15% | All positions liquid | Major positions illiquid |

Weighted sum → Risk Score 1-10

Labels: 1–3 Low, 4–5 Moderate, 6–7 High, 8–10 Critical

Output Format

Quick Risk Check

## Risk Check — [Account/Vault]

🟢/🟡/🟠/🔴 **Risk Score: X/10 — Low/Moderate/High/Critical**

| Metric | Value | Status |
|---|---|---|
| Margin Used | X% | 🟢/🟡/🟠/🔴 |
| Free Margin | $X | — |
| Net Exposure | $X (Xx leverage) | 🟢/🟡/🟠/🔴 |
| Largest Position | MARKET (X% of exposure) | 🟢/🟡 |
| Unrealized P&L | $X (X% of equity) | — |
| Daily Funding Cost | $X | — |
| Tightest Liquidation | MARKET @ $X (X% away) | 🟢/🟡/🟠/🔴 |

### Recommendations

When risk score ≥ 7, lead with the warning block **before** the metrics table.
Then include a prioritized remediation list tailored to what's driving the score:

- **Margin >75%:** "Reduce your [largest position] by X% to bring margin below 70%.
  Use `paradex-order-builder` to size the closing order; check `paradex-pm-analyzer`
  for precise IMR impact before placing."
- **Concentration >40% single position:** "Trim [MARKET] to below 30% of total exposure."
- **Leverage >7x:** "Net exposure is [X]x account equity — close or reduce [largest
  position] first."
- **Funding >0.1%/day:** "Daily carry cost on [MARKET] is ~$[X] — at this rate you pay
  ~$[Y]/month. Evaluate whether expected return justifies the carry."
- **Liquidity risk:** "Your [MARKET] position may be hard to exit at full size — consider
  a staged exit over multiple orders."

When score 60%
- Always note that liquidation estimates are approximate — actual liquidation depends on
  mark price which can differ from last traded price
- Stress test results assume instantaneous price moves — real liquidations can cascade
- This is risk analysis, not financial advice
- Recommend the user verify critical numbers on the Paradex UI before acting

See [margin-model.md](references/margin-model.md) for detailed Paradex margin formulas and risk scoring methodology.

## Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

- **Author:** [tradeparadex](https://github.com/tradeparadex)
- **Source:** [tradeparadex/paradex-skills](https://github.com/tradeparadex/paradex-skills)
- **License:** MIT

Install and usage instructions live in the source repository linked above.