> For the complete documentation index, see [llms.txt](https://prismnetwork.gitbook.io/prismnetwork-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://prismnetwork.gitbook.io/prismnetwork-docs/5.-risk-management-system.md).

# 5. Risk Management System

Prism Network's risk management system covers critical areas including account permissions, data trustworthiness, AI output boundaries, market risks, execution security, and result traceability. Since prediction markets are not single-price trading venues, their risks stem not only from price volatility but also from event definitions, external information, platform rules, liquidity depth, settlement mechanisms, and user authorization boundaries.

Therefore, Prism Network's risk management system is a complete end-to-end pipeline running throughout the system, ensuring that the analysis, judgment, and execution capabilities of AI strategy accounts always operate within the boundaries of user authorization, data trustworthiness, market executability, and path traceability.

In Prism Network, AI can participate in signal understanding, probability judgment, and strategy generation, but cannot directly bypass account permissions, market status, execution rules, or audit records to operate funds. All strategies must pass through account authorization, signal validation, market status checks, execution parameter confirmation, and result recording before entering the actual trading workflow.<br>


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