Delta-Neutral Strategy Combined with Fixed Income

Delta neutrality sounds safe, but once funding rates reverse, the approach reveals its weaknesses. That's when additional mechanisms are needed to lock in returns.

How to do it? The logic is actually quite simple: maintain delta-neutral positions while setting up hedges on funding rate contracts. This way, you capture returns during positive funding rates and stay unfazed when negative rates arrive — the rates are locked in.

By combining fixed income solutions, you can convert variable funding rates into stable cash flows. This combination strategy is particularly suited for risk-averse traders who want to extract returns from market structure. The core principle is finding that balance point: market neutral yet returns guaranteed.