Is market neutrality really risk-free? ⚖️
🔹 Market neutrality means a position depends weakly on general market rises or falls.
🔹 However, neutrality is incomplete because different coins react to the same market movement with different strength.
🔹 Other risks remain: connection loss, liquidity, fees, funding, and position liquidation.
🔹 Neutrality only describes direction—it does not mean there will be no losses.
💡 Example: The market drops. Coin A falls by 10% while Coin B falls by 6%. A Long on A and Short on B gives -10% + 6% = -4%. Neutrality didn't protect because the coins reacted differently.
⚠️ A common mistake is believing a pair trade cannot go negative because "the legs hedge each other."
Which pair risk do beginners underestimate the most?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
🔹 Market neutrality means a position depends weakly on general market rises or falls.
🔹 However, neutrality is incomplete because different coins react to the same market movement with different strength.
🔹 Other risks remain: connection loss, liquidity, fees, funding, and position liquidation.
🔹 Neutrality only describes direction—it does not mean there will be no losses.
💡 Example: The market drops. Coin A falls by 10% while Coin B falls by 6%. A Long on A and Short on B gives -10% + 6% = -4%. Neutrality didn't protect because the coins reacted differently.
⚠️ A common mistake is believing a pair trade cannot go negative because "the legs hedge each other."
Which pair risk do beginners underestimate the most?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
