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Earlier, we said tail risk was high. We’ve seen all kinds of market conditions these past few days...



But looking at this quant trader’s current positions and trading activity, is the tail risk really that high?

It’s actually pretty easy to keep risk under control. The only thing is, the returns are genuinely low too—monthly returns of 2–5% really don’t appeal to crypto traders...
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YieldAlchemist
When it comes to tail risk, I think it depends on the specific hedging strategy. Simply reducing position size isn’t enough; you need to consider whether they’re doing volatility surface arbitrage or hedging across expiries. I also keep some funds on Curve for options hedging. It’s cumbersome, but it can significantly reduce drawdowns.
OnChainDiver
2–5% monthly? Even my grandma’s fixed-term deposit is more exciting than this. Is your quant strategy meant to cure insomnia, or are you actually trying to make money?