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Are you afraid that after the BTC rise, a sharp correction will begin? It’s a pity to close the position, but holding it is scary. Let's analyze a hedging strategy that allows you to lock in profit and stay in the market!
📌 The essence of the strategy:
1. Open a long position on spot ($10) and a short position on futures ($10)
2. When the price rises, lock in some profit
3. In case of a decline - the short compensates for losses
💰 Example calculation:
- Starting conditions: BTC = $60,000
- Opened:
- Long 0.0001666 BTC ($10)
- Short 0.0001666 BTC ($10)
🔹 The price rose to $72,000 (+20%):
- Long: 0.0001666 × 72,000 = $12 (+$2 profit)
- Short: 0.0001666 × 72,000 = $12 (-$2 loss)
- TOTAL: $0 (but we are locking in profit!)
🔹 Actions:
1. Close the long position completely (+$12 on balance)
2. Close half of the short (returning $6)
3. Open a new long position for $5 (0.0000694 BTC)
🔹 The price fell to $66,000 (-8.33%):
- New long: 0.0000694 × 66,000 = $4.58 (-$0.42)
- Remaining short: 0.0000833 × 66,000 = $5.50 (+$0.50 profit)
- TOTAL: +$1.08 net profit!
⚡ Why does this work?
- Lock in profit without fully exiting
- Reduce the margin call risk
- Flexibly adapt to the market
⚠️ Important nuances:
- Monitor the funding rate
- Consider the fees
- Works better in a trend
💬
How do you hedge your positions? Have you tried similar strategies? Share in the comments!