HypurrTrade

A portion of our treasury will be dedicated to executing both directional and delta-neutral trades on the Hyperliquid platform, maximizing volume and yield for our community. This document assumes basic familiarity with trading terms and perpetual futures mechanisms.

What does this mean?

• Directional trades take a position on an asset, either long or short, based on the bias of the trader executing the trade. For example, a long on HYPE with a position size of 1,000 HYPE is a directional trade, as the trader is betting on the price going up. If the price rises from $20 to $25, the trader is in profit of $5,000. If the price drops from $20 to $10, the trader is in loss of $10,000. These trades will be executed as a part of our strategy, mainly focusing on major tokens, HYPE and spot tokens to minimize the risk from volatility and embody our Hyperliquid-first ethos in our trading strategy.

• Delta-neutral trades are trades whose value do not get affected by small changes in the underlying asset being traded. This means that whether the price goes down or up, the value of the overall position does not change. Execution of this strategy on Hyperliquid uses funding rate arbitrage, which is a delta neutral strategy designed to collect returns on the funding rates on tokens. This is also termed a basis trade, where a trader simultaneously buys an asset on spot and shorts the asset for the same size, intending to collect yield on the funding rate offered for holding a short position. If a trader simultaneously buys and shorts 1,000 HYPE, a price drop from $20 to $15 reduces the spot value by $5,000 but increases the short value by $5,000 and vice versa. Making money on this strategy involves exploiting high funding rates on Hyperliquid relative to other platforms.

Yield from these trades will be returned to our treasury. In the future, trading strategies will be implemented as part of a Hyperliquid Vault that we will create and fund.