# Liquidity And Rotation Opportunity Cost Rules

## Purpose

Every recommendation must consider the cost of moving capital, not only the attractiveness of the next ticker.

This is especially important when preparing 10,000,000 KRW for `SOXL` or `SOXS`, because the user may need to sell an underwater holding, wait for settlement or broker cash availability, and miss price movement during the waiting window.

## Broker Cash Availability Assumption

Use this as the default until the user confirms exact Namuh/NH account behavior:

- US market standard settlement: `T+1` from May 28, 2024.
- User broker assumption: Namuh/NH usable cash preparation can take `1-2 Korean business days` depending on sold asset, currency, orderable cash, FX, withdrawal, and account settings.
- Conservative planning default: assume `2 trading days` before a newly raised 10,000,000 KRW tactical cash bucket is safely available.
- If broker app shows immediately orderable USD/KRW cash, use the broker value over this default.

## Required Rotation Questions

Before recommending selling a current position to enter `SOXS`, `SOXL`, or another fast opportunity, answer:

1. What exactly is being sold?
2. Is the sold position broken, merely underwater, or near a rebound trigger?
3. How much cash becomes usable immediately, after 1 trading day, and after 2 trading days?
4. What is the expected move of the new opportunity during that waiting window?
5. What is the expected move of the sold holding during that same window?
6. What is the tax effect, if any?
7. What is the psychological cost of locking in the loss?
8. Does the new trade still have positive expected value after delay, spread, FX, slippage, and missed rebound risk?

## Scenario Table

Every urgent rotation recommendation should include:

| Scenario | Action | Cash ready | Expected benefit | Opportunity cost | Verdict |
| --- | --- | --- | --- | --- | --- |
| Keep current holdings | No forced sale | Immediate existing cash only | Avoid selling bottom | May miss SOXS/SOXL move | HOLD/WAIT/DEFEND |
| Partial trim | Sell weakest portion | T+0 to T+2 depending broker | Creates tactical cash | Reduces rebound exposure | STAGED ROTATION |
| Full exit | Sell full weak holding | T+0 to T+2 depending broker | Funds new trade | Locks loss and misses rebound | ONLY IF THESIS BROKEN |
| Pre-fund cash | Raise 10M before signal | Ready before trigger | Can attack fast | May sit in cash during rebound | CASH OPTION |
| Skip new trade | No rotation | No change | Avoid forced timing | May miss downside/upside trade | REST/WAIT |

## Opportunity Cost Formula

Use qualitative scoring when exact data is unavailable:

`net_rotation_edge = new_trade_expected_edge - sold_holding_rebound_edge - settlement_delay_cost - tax_drag - spread_slippage_fx_cost - fatigue_cost`

Labels:

- `CLEAR ROTATION`: new trade edge remains strong after all costs.
- `STAGED ROTATION`: sell only enough to create optionality.
- `CASH OPTION ONLY`: prepare cash early, but do not enter yet.
- `DO NOT FORCE SALE`: avoid selling an underwater holding solely to chase.
- `WAIT FOR CASH`: signal is good, but cash timing makes current entry inefficient.
- `MISSED WINDOW`: the setup moved too far during the cash delay.

## SOXS Specific Rule

`SOXS` is allowed only when semiconductor downside is clear enough to overcome:

- The loss locked in by selling current holdings.
- The risk that current holdings rebound while `SOXS` entry is delayed.
- The risk that the bearish move is already mature by the time cash is ready.
- The higher whipsaw risk of inverse leveraged ETFs.

If `SOXS` requires selling an underwater holding and waiting 1-2 days, the report must compare:

- `Sell now and wait for cash`.
- `Sell partial now, keep rebound exposure`.
- `Use only already available cash`.
- `Skip SOXS and reduce portfolio beta instead`.
- `Wait for next short setup`.

## SOXL/SOXS 10M Cash Warning

When there is a meaningful chance of a first `SOXL` or `SOXS` recommendation within 2-3 trading days:

- Issue `10M CASH OPTION WARNING`.
- Do not call it an entry signal.
- Identify which holdings are possible funding sources and whether they are broken, crowded, or near rebound.
- State the expected cash-ready date range.
- State the cost of preparing too early and the cost of preparing too late.

## Required Output Fields

For any rotation into a leveraged/inverse ETF:

- Funding source.
- Current unrealized P/L of funding source if known.
- Thesis status of funding source: `BROKEN`, `DAMAGED`, `REBOUND WATCH`, `DEAD MONEY`, `STRONG HOLD`.
- Cash-ready assumption: `IMMEDIATE`, `T+1`, `T+2`, or `UNKNOWN`.
- New trade window: `OPEN`, `EARLY`, `MATURE`, `MISSED`, or `UNKNOWN`.
- Net rotation label.
- Alternative plan if cash is late.
- Do not force sale condition.

## Fatigue Rule

If the rotation requires several fast decisions while the user is stressed:

- Prefer partial trim or cash option over full forced sale.
- Prefer a smaller trade with a clear stop over a large all-or-nothing switch.
- If the setup is no longer clean after cash delay, label `MISSED WINDOW` and move on.