Hedge Ratio Calculator
Spot hedge · Perp short · Required margin
100% = full hedge · 50% = partial
For funding cost estimate
Frequently Asked Questions
What is a hedge ratio in crypto trading?
A hedge ratio is the proportion of your spot position you protect with a short perpetual futures contract. A 100% hedge ratio means you open a short perp equal to the full value of your spot holdings, neutralizing price risk. A 50% ratio gives partial protection while keeping some upside.
How much margin do I need to hedge my spot position?
Required margin = (Spot Size × Hedge Ratio) / Leverage. For example, hedging $10,000 of BTC at 100% ratio with 2× leverage requires $5,000 in margin. Higher leverage reduces the margin needed but increases liquidation risk on the short leg.
What is the cost of hedging with perpetual futures?
Hedging with a short perp has an ongoing funding cost. When funding rates are positive (longs pay shorts), short holders receive funding — making the hedge cash-flow positive. When funding is negative, you pay it. The calculator estimates daily and annual funding cost based on the current 8h funding rate.
When should I use a partial hedge ratio instead of 100%?
A partial hedge (e.g. 50–75%) is useful when you want to reduce downside risk while still participating in potential upside. It also requires less margin. Traders often use partial hedges during uncertain market conditions rather than closing their spot position entirely.