A hedge can reduce one risk while creating other obligations.
Start with the exposure you already have
A hedge is intended to offset some existing exposure. For a spot holding, an opposite perp position can reduce sensitivity to price movements. Size the illustration from the asset quantity or dollar exposure, not from the amount of margin you want to spend.
A partial hedge leaves some directional exposure; a full nominal hedge still has costs and tracking differences.
The two sides need separate management
Spot and perp prices can diverge. Funding and execution fees change the combined result. A short hedge can lose as the asset rallies even while the spot holding gains value.
That spot gain does not automatically provide usable margin to the short. If the collateral is separate, the short can be liquidated before you move funds or realize the gain.
Plan how the hedge ends
Decide what event or condition ends the hedge and how both legs will be reconciled. Closing only the spot holding can leave a naked short; closing only the short restores full spot exposure.
A derivative linked to an equity, commodity, or private-market reference may be a much less exact match than the simple crypto example. Check contract specifications and your actual holding before assuming an offset.
A partial hedge
Holding 2 units of an asset and shorting a 1-unit perp leaves roughly 1 unit of net price exposure if both move together. A $10 decline implies about a $20 spot loss and $10 short gain before funding, fees, and basis changes.
Illustrative figures only. Not a price forecast or trade recommendation.Further reading
Protocol details and market rules can change. Check the current specification before trading.
Educational content, not investment advice. Trading perpetuals can result in substantial loss. Market access is subject to eligibility and location. Product disclosures.