Hedge
A position taken to offset risk in another position — most often via a derivative.
In stablecoin yield strategy, hedges typically appear as short-perp positions offsetting long spot exposure (Basis trade, Delta-neutral designs). Hedging removes price risk but introduces funding-rate, liquidity, and counterparty risks.
Related terms
- Delta-neutralA position where price-sensitivity to the underlying asset nets to zero — long spot offset by short derivative.
- Basis tradeLong spot + short perpetual (or futures) to harvest the funding-rate differential, structurally close to delta-neutral.
- Perpetual (perp)A futures contract with no expiry, kept anchored to spot via the [[funding-rate]].