> For the complete documentation index, see [llms.txt](https://cicada-finance.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://cicada-finance.gitbook.io/docs/faq/how-did-the-strategy-perform-during-major-market-stress-events.md).

# How did the strategy perform during major market stress events?

During major market stress periods, including large liquidation events and sharp market sell-offs, the underlying strategy maintained limited directional exposure and was not materially affected by spot market price movements.

The main sources of short-term drawdown came from:

* Trading fees
* Slippage
* Bid-ask spreads
* Position rebalancing costs
* Temporary execution inefficiencies during volatile market conditions

These costs are expected in market-neutral arbitrage and hedged allocation strategies, especially during periods of rapid market movement or liquidity compression.