Use your in-the-money options as collateral to open inverse perpetual positions before expiry. This creates a synthetic hedge, maintaining your profit level regardless of price movement.

Go to the Portfolio page, select an in-the-money option you want to hedge, and click the HEDGE button to enter the size and review trade details.

Auto-bid positions cannot be hedged directly. To hedge an auto-bid position, first close the auto-bid strategy, and then bid receipts will become available to hedge.

Once hedged, the position using option collateral will appear in the POSITIONS table on the Perps page.



PnL is determined by two factors

To fully close a position, click the CLOSE button in the POSITIONS table. 

If the perps portion incurs a loss, the position cannot be closed until the option expires, at which point it will be automatically closed.

When using call or put options as collateral, they typically won't face liquidation risk because combining perpetual contracts (perps) and options creates a synthetic payoff that balances market risks effectively. For instance, if the market moves unfavorably for the perps position, gains from the options position can offset those losses, maintaining overall stability.

However, capped calls or capped puts, which have a maximum limit on potential gains, can be liquidated if they become deeply in-the-money. In such cases, their value reaches a capped level, unable to offset further market volatility from perps positions, which may trigger liquidation to control risk exposure.

Collateral Value = 70% * Unrealized PnL from Perps + Intrinsic Value from Option Collateral

Here, only 70% of the Unrealized PnL from perps is considered to mitigate rapid market fluctuations, and the intrinsic value of option collateral represents its immediate exercisable value (e.g., if the strike price is 100 and the underlying asset price is 120, the intrinsic value is 20).

Upon liquidation, the entire option collateral is transferred to the TLP and settled at the option's expiry. Additionally, 1% of the liquidation fee collected is directed to an insurance fund designed to safeguard and stabilize the TLP's overall financial health.