Hedging helps reduce risks when trading cryptocurrencies, especially in high volatility conditions. Let's consider three working methods for a $100 deposit on Binance.
1️⃣ Spot + Futures (Arbitrage)
How it works:
- Buy BTC on the spot market (for example, 0.00095 BTC for $100).
- Open a short position on futures simultaneously with the same volume.
- If futures prices are higher than spot — we take profits.
Pros:
✅ Protection from sharp price movements.
✅ Opportunity to profit from price differences.
Cons:
⚠️ Need to monitor futures funding.
⚠️ Fees can reduce profits.
2️⃣ Protection through Put option
How it works:
- Buy BTC for $100.
- Buy a Put option (strike $104,000, term 7 days) for $5–$10.
- If the price drops, the option will compensate for the losses.
Pros:
✅ Limited risk (maximum loss = cost of the option).
Cons:
⚠️ For $100, fees can be high.
3️⃣ Split deposit (BTC + USDT)
How it works:
- 50% ($50) — in BTC.
- 50% ($50) — in USDT.
- When BTC rises, we take profits; when it falls, we buy more.
Pros:
✅ Simplicity and minimal fees.
✅ Flexibility in risk management.
Cons:
⚠️ Does not protect against sharp crashes.
🔎 What to choose for $100?
- The best option is No. 3 (BTC/USDT split) + limit orders.
- If you have experience, you can try arbitrage (No. 1).
- Options (No. 2) — for more experienced users (due to fees).
📌 Important:
- Always test the strategy on a demo account.
- Consider Binance fees.
💬 How do you hedge risks? Share in the comments!