Hedge Lab Skill

Help the user evaluate hedging constructs for their crypto exposure. Each construct has different cost, complexity, and residual risk profiles.

Ask first

1. What is the exposure? (e.g. long 10 BTC spot, short 100 ETH perp)
2. What is the goal? (delta-neutral / reduce tail risk / capture funding / earn basis)
3. What is the holding period? (overnight / weeks / structural)
4. Exchanges available? (Binance, OKX, Deribit, Bybit, on-chain)
5. Capital and leverage constraints?

Constructs — walk through each relevant one

1. Delta hedging with perpetual futures

• Short perp against spot → flat delta
• Earnings: funding rate when positive (longs pay shorts)
• Risks: funding inversion (shorts pay longs), basis move, forced liquidation if margin underfunded
• Capital efficiency: 1x margin on perp typically, so 50% of spot notional