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Sector concentration & cluster-risk preview

Every trade ties up more capital in a specific sector. Too much in one corner - e.g. three names in "Consumer Cyclical" plus a cash-secured put on a fourth - makes you vulnerable to a sector crash. WheelTrading surfaces this in three places, so you notice before hitting Send if you're stacking up on one industry.

Where you see it

1. Portfolio overview: sector chip with percentage

On the dashboard, inside the "Portfolio Risk Dashboard" panel, every row of the Top Put Options and Stock Positions tables shows a sector chip like:

🟡 Consumer Cyclical · 22.3 %

That percentage is your capital tied up in this sector as a share of Net Liquidation Value (total account value). The bullet colors follow your personal limits:

  • 🟢 below your warn threshold (default 20 %)
  • 🟡 between warn and hard threshold (default 20-30 %)
  • 🔴 at or above your hard threshold (default 30 %)

The percentage number colors the same way. Hovering the chip reveals your active thresholds.

2. Company page: what-if preview

On the company detail page (Research -> Companies), directly below the portfolio banner, you'll find the "🥧 Sector concentration" panel. It is collapsed by default – always visible are:

  • the sector bar with your current share (same color logic as in the

cockpit)

  • the percentage + bullet as a traffic light

Use the Details chevron in the top-right corner to expand (state is remembered per device):

  • Positions in the sector – every stock and short-PUT position that

currently contributes to this sector, sorted by capital tied up. Each row shows symbol, type (stock / short put), quantity (or strike for puts), average entry price and capital tied up. Clicking the symbol jumps to that company's detail page.

  • What-if calculator for a hypothetical cash-secured put: contracts

× strike. A click on ~5% OTM presets the strike to a reasonable value around the current price.

  • Projected sector share after this trade (second bar with delta in

percentage points) plus a plain-text verdict in green / amber / red.

That way you can see, while researching, where the cluster risk comes from and whether this name fits your current portfolio – before you dive into the option chain.

3. Send dialog: assignment-diversification preview

When you actually send an order, the existing assignment-diversification preview kicks in on top (cluster gate with a locked Send button). Both views use the same value basis.

4. Cockpit panel: symbol → sector flow

Inside the cockpit's 🗓️ Diversification Risk panel you'll find a new block 🔗 Symbol → Sector mapping placed between the symbol table, the sector table and the donut chart. It answers the question "which symbol actually feeds into which sector?" visually:

  • Flow diagram (desktop / tablet): your symbols on the left, the

sectors on the right. A coloured band links every symbol to its sector, band width proportional to the exposure share.

  • Grouped list (mobile): below the tables you get the same mapping

as sector cards with the linked symbols indented underneath.

The sector colour is mirrored consistently in three places:

  • coloured left border on each row in both tables,
  • ribbon fill in the flow diagram,
  • donut segment.

That way you can tell at a glance which symbol contributes to which sector without mentally joining the two tables.

Hover / tap: hovering a symbol or a sector with the mouse (or a tap on mobile) highlights all matching pieces and dims the rest. A second tap clears the pin.

Note: the sector mapping follows your market data provider's classification. WheelTrading forwards it unchanged and provides no investment advice.

Value basis (identical across all three views)

  • Stocks: shares × current price (fallback entry price)
  • Short puts: strike × 100 × contracts (cash reserve you'd need

for an assignment)

  • Denominator: net liquidation value of your account

Cash-secured puts are counted at their full notional, not at Reg-T margin - that's the more honest view of the cluster risk you'd carry if the option gets assigned.

Adjusting the limits

Warn and hard thresholds are stored per IBKR account in your strategy profile (menu Account -> Strategy, section Risk):

  • Sector warn threshold (sector_warn_pct, default 20 %)
  • Sector hard limit (sector_max_pct, default 30 %)

Each field has a small (i) info icon: hovering it on desktop shows the short explanation; on touch devices the same text is always visible as a small line under the input. The grey "Default: 20 %" placeholder is the currently effective default (system default or plan override). Once you enter your own value, a purple OVERRIDE badge appears — and a click on Reset restores the default.

Rules:

  • Values in percent (0 - 100)
  • sector_warn_pct <= sector_max_pct must hold (backend returns 422

otherwise)

  • Takes effect immediately across all three views
  • When you switch between live and paper accounts, the thresholds of

the currently active account are used automatically

Directly via API (for scripts / automation):

PATCH /api/strategy/accounts/{account_db_id}
{
  "sector_warn_pct": 0.25,
  "sector_max_pct":  0.35
}

Backend stores values as fractions (0..1); the UI renders them as percent (0..100).

Why these defaults?

  • 20 % warn threshold matches a portfolio with roughly 5-6

equally-sized sectors. Anything above that means one sector is over-represented.

  • 30 % hard threshold is where diversification effectively breaks

down - you become a de-facto thematic investor.

  • Much higher values (40 %+) are atypical for a diversified wheel

portfolio and mean a single sector crash could take your account with it.

For deliberate sector-rotation trading (intentional sector bets), push the thresholds up accordingly - the purpose is then a reminder, not a veto.