Definition

Constant Proportion Portfolio Insurance

Meaning ⎊ A strategy that dynamically shifts assets between risky and safe investments to protect a minimum portfolio value.
Greeks.liveMarch 19, 2026

Constant Proportion Portfolio Insurance

Constant Proportion Portfolio Insurance (CPPI) is a dynamic asset allocation strategy that provides a floor for a portfolio's value while still allowing for upside participation. It works by maintaining a ratio between a risky asset and a risk-free asset, adjusting the exposure to the risky asset based on the distance from the floor.

As the portfolio value rises, exposure to the risky asset increases; as it falls, exposure decreases to protect the floor. In crypto, CPPI can be used to manage downside risk while capturing the explosive growth potential of the market.

It requires disciplined execution and careful management of the 'cushion' between the current value and the floor.

Autoregressive Conditional Heteroskedasticity
Insurance Fund Mechanics
Deep Out-of-the-Money Options
Insurance Fund Stability
Capital Ratio
Insurance
Volatility Targeting
Forced Deleveraging Events

Glossary

Portfolio Value

Valuation ⎊ Portfolio Value, within cryptocurrency, options, and derivatives, represents the current market worth of all assets held, factoring in both realized and unrealized gains or losses.