> For the complete documentation index, see [llms.txt](https://docs.axis.to/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.axis.to/susdx-the-rewards-vault/how-axis-earns-yield/trading-strategies/delta-neutrality.md).

# Delta Neutrality

Delta measures how much a position's value is expected to change when the underlying market price moves. A delta-neutral structure pairs exposures so their directional sensitivities approximately offset at a point in time.

## What the hedge reduces

If a long position and a short hedge respond similarly, broad market moves should have less effect on the combined position than on either leg alone. This can make basis, funding, or cross-venue spreads the main intended return driver.

## What the hedge does not remove

Delta-neutral does **not** mean risk-neutral or lossless. The position can still lose money when:

* the basis widens or does not converge;
* one leg fills late, partially, or not at all;
* funding, borrow, fees, or margin terms change;
* liquidity disappears or an exit moves the market;
* a venue, custodian, counterparty, chain, or contract fails;
* the instruments stop tracking each other as expected.

## Why delta changes

Price movement, nonlinear derivatives, funding, rebalancing, and changing correlations can alter the hedge ratio. Maintaining low directional exposure therefore requires measurement and execution; it is not a permanent property of opening two opposite positions.

## How to interpret delta-neutral

Treat “delta-neutral” as a description of the intended directional hedge, not a guarantee about return, drawdown, solvency, or liquidity. See [Market & Trading Risk](/risk/market-trading-risk.md) for the control framework and residual risks.


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