Hedged Trading Strategy

Use a mix of spot and futures trading instruments to play hedged trades that reduce potential losses yet boosts ROI by getting exposure to leveraged positions.

Strategy
Hedged Trading Strategy
Investment Frequency
One-time Investment
Risk
Low
Investment Horizon
Medium Term
Expected Volatility
-25% to +200% YOY

The introduction of derivative instruments such as futures for crypto assets enables new opportunities and trading systems for traders. Derivatives can either be used as hedging or alpha-generating instruments. This means that crypto active-trading fund is able to offer complex investment strategies such as market-neutral, as they have a more advanced toolkit at their disposal.

Capital Allocation

80% money is allocated to spot trading and 20% to futures trading. No long term portfolio is formed only short term trades are executed to gain profit using different short term trading strategies in both spot & futures. Hedging is performed to manage risk.

Use hedging to lower trading risks

While cryptocurrencies are inherently volatile, using leveraged instruments to trade multiple strategies over shorter time frames make them highly risky investments. The bots use various technical indicators to find short term trading opportunities using a mix of strategies to create a straddle trade. A straddle is a neutral strategy that involves simultaneously buying a long position on the spot market and a short position on the futures market with the same entry price. This setup is market neutral and user will not profit or loss whether market moves in one direction or the other. Once a clear market direction is determined by the bot, it removes one leg of the trade and the profitable leg stays. Hence user is able to profit from the direction of the market.

Medium risk with high return potential

Since the bots wait for the market to take a clear direction before removing one leg of the straddle, this strategy is safer than naked futures trading. Like all our other funds, the trades are completely automated and no execution or strategy planning is required from the user.

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