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Depends on what "size" means. On FTX, "size" means "number of the thing you're trading". On inverted orderbooks, "size" generally means "number of the currency you're using"--often USD. And what do you mean by "fully hedge"? Do you want to end with pure USD or BTC?

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and

Oh wow, thank you for chiming in! I am looking to be 100% in synthetic USD after completing a trade. Does that clarify?

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and

Sorry I dont think I answered for “size”. So let’s say “size” = 100% of balance @ execution price (with BTC as collateral) Then I successfully complete a long that I close at +1% from avg entry I am looking to close it and be fully hedged accounting for the new profits

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Got it. And when you say 'long'--since you're saying that 'flat' means 'all synthetic usd', then being flat means depositing BTC to e.g. BitMEX and selling BTCMEX futures to get flat (hedging your BTC collateral). Long would mean just depositing BTC and not trading.

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and

But I'm guessing that's not what you're saying--if by flat you mean 'flat except for the BTC collateral that you deposit', then: 1) deposit 1 BTC 2) Buy X contracts 3) 1% higher, sell X*1.01 contracts Then you bought X/P BTC and sold X/(P*1.01)*1.01 = X/P BTC

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and

Thank you, Sam! I am saying the former! By ‘flat’ I mean short the amount I deposited plus any gains. I am looking to be fully synthetic USD the entire account balance after each trade. What is P in your equation? 🙏🙏✊

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and

Would it simply be X*2.02 then? Or X*2.01?

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Ah makes sense! (Sorry, P is price.) So then it would be: 1) deposit 1 BTC 2) price goes up to 1.01P 3) short contracts to get flat At that point you'd still just have 1 BTC, and so you'd want to short 1.01*P contracts to be fully hedged

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and

Got it! Does it apply if I 1x long on top of deposit? buy 1 btc from FTX :) deposit 1 btc on mex. Btc P = $10k. I long 10k contracts on Mex. So I am net long 2 btc on mex or $20k. I want to be 100% synthetic USD after closing at +1%. Do I limit sell for 2.02(10k) or 2.01(10k)?

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and

It seems from your answer it’s 2.01(# of contracts). Idk why this kind of math is just not my forte ha. Thanks again!

SBF

@SBF_FTX

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@thalamu_

So in that case, after BTC goes up 1%, you have to: (a) sell the 1.01 contracts, as before (b) sell out of the BTC position you put on. That's another 10k contracts, which got you 1 BTC; so selling that 1 BTC means selling another 10.1k contracts so it's 2.02 total

10:00 PM · Jun 24, 2020Twitter Web App

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and

🙏🙏🙏🙏 you rock thank you

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and

Hey guys, good dialog, great to see twitter can be used for minutiae. One point and maybe this is semantics. Did I understand example correctly that the sell happens after the Long position is closed? In that case, isn’t this flipping to a short position (and not hedging)?