Contents
What is Hedging?
Hedging employs COIN-M 1x short futures to hedge against price volatility risks. It earns crypto coins when prices fall while preserving USD-denominated value when prices rise. With 1x leverage eliminating liquidation risk, you concurrently earn funding fees and grid arbitrage profits, achieving dual benefits of stable value preservation and yield.
Key Features of Hedging
- Dual Modes: Segmented Hedging & Full Hedging
- Profit in Bull & Bear Markets
Bearish: Earn crypto as prices drop.
Bullish: Sell crypto at higher prices. - Grid Volatility Arbitrage:Profit from price fluctuations within grid intervals.
- Funding Rate Revenue:Earn fees from maintaining short positions.
- Zero Liquidation Risk:1x leverage eliminates bankruptcy fears.
What is the difference between Segmented Hedging and Full Hedging?
| Segmented Hedging | Full Hedging | |
| Mechanism | Operates via futures grids to automatically buy low and sell high within price ranges.• Price drops: Earn crypto• Price surges: Sell crypto in batches at higher prices. | Traditional model: Opens a full-position hedging short order at the current or trigger price. |
| Profits | Grid profits + Funding fee | Funding fee |
| Applicable users | Range traders: Users seeking steady crypto earnings/batch selling during volatility. | Passive users: Users prioritizing instant position opening at current/trigger prices without frequent adjustments. |
Applicable Scenarios
Selling Coins
Suppose the current BTC price is 150,000 USDT and you want to sell 1 BTC. Two scenarios may occur:
Scenario 1 – You believe the price has peaked and want immediate execution:
→ Choose Full Hedging: Deposit 1 BTC. Your asset value remains fixed at 150,000 USDT regardless of future price movements, equivalent to selling at 150,000 USDT. Additionally, earn funding fees.
Scenario 2 – You expect price fluctuations but fear selling too early:
→ Choose Segmented Hedging: Deposit 1 BTC, set a price range (e.g., 130,000–180,000 USDT). The robot will sell BTC in batches at higher prices for an above-current average selling price. Also earn grid arbitrage profits + funding fees.
Segmented Hedging sells at higher levels, increasing USDT-denominated value.
Investing Coins to Earn More Coins
If you plan to hold long-term but anticipate a downturn after a peak:
→ Open a Hedging bot to earn more crypto during declines.
Choose based on market conditions:
- Consolidated decline → Segmented Hedging (ideal for choppy downtrends)
- One-way decline → Full Hedging (optimized for steep drops)
Prices below entry level = earn more Coins.
How to Use
- Go to Bots → Hedging Bot → Select Segmented Hedging or Full Hedging per strategy.
- In COIN-M Futures Grid → Choose Hedging.
FAQ
Q: What advantages does using a Hedging bot offer over spot selling?
After executing spot selling via limit/market orders, no additional profits accrue. In contrast, a Hedging bot not only sells coins in batches at higher prices but also generates additional grid profits + 5%～+20% annualized funding fees.
Q: How does Hedging differ from standard futures grids?
Hedging uses COIN-M 1x short futures as its core mechanism, sharing identical fees and operational logic with standard grids.
Q: How does Hedging differ from Arbitrage?
Arbitrage: Short perpetual futures while holding equivalent spot positions to profit solely from funding rates.
Hedging: Combines COIN-M 1x shorts with grid trading, enabling profits from price drops (crypto gains), surges (USD gains), and funding rates.
Q: Is Hedging better for bearish or bullish markets?
Both.
Bull Markets: Use Hedging to lock in gains as prices peak or exit gradually.
Bear Markets: Profit from falling prices.
Sideways Markets: Earn funding rates and grid arbitrage.
Q: Can Hedging Bot liquidate?
No. The 1x short position ensures zero liquidation risk.
Q: Do I lose if prices keep rising?
Your U-denominated balance increases as prices rise, but profits may lag behind holding/bullish strategies.
For sustained rallies, consider futures grid longs for higher returns.
