Does market neutrality mean zero risk? 🤷
🔹 Market neutrality means a position depends weakly on overall market growth or decline.
🔹 Neutrality is incomplete: different coins react to the same market movement with different strength.
🔹 Key risks remain: connection loss, liquidity, fees, funding, and position liquidation.
🔹 Neutrality speaks about direction, not that there will be no losses.
Example: The market drops. Coin A falls by 10% and Coin B by 6%. A long on A and short on B give -10% + 6% = -4%. Neutrality did not protect because the coins reacted differently.
⚠️ Typical mistake: Believing a pair trade cannot go into a loss 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 overall market growth or decline.
🔹 Neutrality is incomplete: different coins react to the same market movement with different strength.
🔹 Key risks remain: connection loss, liquidity, fees, funding, and position liquidation.
🔹 Neutrality speaks about direction, not that there will be no losses.
Example: The market drops. Coin A falls by 10% and Coin B by 6%. A long on A and short on B give -10% + 6% = -4%. Neutrality did not protect because the coins reacted differently.
⚠️ Typical mistake: Believing a pair trade cannot go into a loss because "the legs hedge each other."
Which pair risk do beginners underestimate the most?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
