States

0 SIDELINE

No open positions. All funds are in DAI.

1 LONG

All funds are 100% long. This state will be entered into in a bull market or in a sideways (crab) market that has a funding rate and the long side is underfunded. The purpose is to collect the funding rate payment while the market is not trending. The risk is that the market will make a large downward move, thus wiping out any profits.

2 SHORT

All funds are 100% short. This state will be entered into in a bear market or in a sideways (crab) market that has a funding rate and the short side is underfunded. The purpose is to collect the funding rate payment while the market is not trending. The risk is that the market will make a large upward move, thus wiping out any profits.

3 NEUTRAL

This is a non traditional form of being delta neutral, it consists of being both long and short in the same market at the same time. The number of long and short tokens are readjusted so that their DAI value is equal if the difference is beyond a given threshold. The state will neutralize the Float protocol exposures and the funding rate, if present. This state is guaranteed to be profitable but will only profit from the protocol's stake and synth APYs which are usually very low. This state will be entered if a position loses a predetermined amount of money or, possibly, if the market is choppy. The purpose of this state is to wait until the market begins to trend again without having to redeem funds and then reenter the same market. This saves time and gas fees.

4 UNBALANCED LONG

This state might be used in bull market that has large pullbacks.

5 UNBALANCED SHORT

This state might be used in bear market that has large pullbacks.