How to Use Reverse Perpetual Contracts to Hedge?

2022 年 4 月 7 日

While buying/selling, you can sell/buy the same amount but opposite direction of contracts at BitYard as a way to protect against risk and offset losses due to price movements. In times of the instability of the market price, you can ensure the value of your crypto currencies that you are holdings.

Here is an example of how you can hedge through a Reverse Sustainability Contract at BitYard:

User A buys and holds an ETH at the price of 3000 with the following contracts through BitYard,

Product: Reverse Sustainability Contract of ETHUSD

Specification: 1X leverage/short

ETH market price remains at 3000

No profit or loss on positions

ETH market price drops to 1500

There is a opening position of 1 ETH. When the user close the position, he will have the original 1 ETH + 1 ETH position profit = 2ETH in the account.
Even if the market price drops by half, the total value of the position remains the same.

ETH market price rises to 6000

There is a opening position of 0.5 ETH. When the user close the position, he will have the original 1 ETH — 0.5 ETH position loss = 0.5 ETH.
0.5 ETH = $3000, and the total value of the holdings remains unchanged.

If the user only holds 1 ETH, he will face a higher risk if the market rises or falls as mentioned above.

However, through this method of operation, users can still achieve hedge even if the market is unstable.

Note: The above calculation of profit and loss does not include transaction fees.
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