Bumper Docs
bumper.fiDiscordForum
  • Learn
    • What is Bumper?
    • Documentation Structure
    • Why Use Bumper?
      • Comparison with stop-loss
      • Comparison with options
    • BUMP Token
      • Overview
      • BUMP Token Ecosystem
        • Design Background
        • Token Utility
        • Token Network
          • Network Bond (Primary Utility)
          • Network Incentive (Primary Utility)
          • Representative Governance (Primary Utility)
          • Network Boost (Secondary Utility)
          • Staking (Secondary Utility)
        • Roadmap
        • Token Metrics
          • Token Details
          • Token Emission
        • DAO Governance
          • Current Status
          • Future Status
    • Staking
    • Guides
      • Connect a wallet
      • Hedge - Open a position
      • Hedge - Exit a position
      • Hedge - Renew a position
      • Earn - Open a position
      • Earn - Close a position
      • Earn - Renew a position
      • dApp Interface
        • Dashboard
        • Hedge Positions
        • Earn Positions
      • Risk Rating
      • How do I add my BUMP to Metamask?
      • How do I add my bUSDC token to MetaMask?
      • How to buy BUMP on Uniswap
      • Liquidity Mining
        • How to Participate In Bumper’s Liquidity Mining Program - A step-by-step guide
      • Troubleshooting
      • Use cases & strategies
      • Legacy Guides
        • How to unstake & claim rewards from legacy staking
        • Claiming vested BUMP tokens
        • Withdrawing liquidity from Bumper's legacy LP program
        • Claiming BUMP tokens for Public Sale Participants
    • Protocol Risks
      • General risks
      • Taker liquidations
      • Maker liquidations
    • Premiums and Yields
    • FAQs
    • Troubleshooting
  • Protocol
    • Overview
      • Preliminaries
      • User Positions
    • Premium
      • Price Risk Factor (PRF)
      • Liability Risk Factor (VRF)
      • Probability of Claim
      • Liquidity Risk Factor (LRF)
      • Computing the Premium and Updating State
      • Visual Representation of Premium
    • Rebalancing
      • Cross-Side Rebalance and Swap Deadband
      • Asset and Capital Ledger
      • Rebalancing Trade Grid
      • Computing Swap Amounts
      • Same-Side Rebalancing
    • Taker Lifecycle
      • Taker Optionality
      • Taker Share
      • Taker Fungibility
      • Taker Position Token
      • Taker Risk Rates
      • Taker Renewal
      • Taker Close and Claim
      • Taker Position Expiry
      • Taker Ejection
      • Taker Cancellation
    • Maker Lifecycle
      • Maker Optionality
      • Maker Share
      • Maker Fungibility
      • Maker Position Token
      • Maker Risk Rates
      • Maker Withdrawal
      • Maker Renewal
      • Negative Yields
    • Simulation
    • Glossary
  • Governance
    • Overview
    • DAO Overview & Structure
      • Purpose of the DAO
      • Committees
      • Forum
      • Quorums
    • Economic Settings
      • Parameter tuning
      • Community involvement
    • Voting Power
      • vBUMP
      • Staking & Locking
    • Bumper Improvement Proposals (BIPs)
      • Before a proposal is created
      • Raising a proposal
      • Committee review
      • Warmup Period
      • Voting period
      • Grace & Queue periods
      • Abrogation
    • DAO user guides
      • How to Stake tokens in the Bumper DAO
      • How to Unstake tokens in the Bumper DAO
      • How to Claim Staking Rewards in the Bumper DAO
      • How to Lock tokens in the Bumper DAO
      • Delegating vBUMP
      • How to Undelegate vBUMP in the Bumper DAO
      • Voting on a governance proposal
      • Cancelling a vote
      • Voting on an Abrogation Proposal
      • Creating a Proposal in the DAO
      • Execute a proposal in the Bumper DAO
    • DAO Legal
  • Developers
    • Architecture
    • Modules
    • Contract Address List
  • Community
    • Community Code of Conduct
    • Alpha
      • Feedback and Support
      • Reporting Bugs
      • Connecting to Bumper network
  • Security
    • Audits
  • Legal
    • Terms and Conditions
    • Disclaimer
    • Privacy Policy
Powered by GitBook
On this page
  • How to open a hedging position
  • Premiums and Fees
  1. Learn
  2. Guides

Hedge - Open a position

PreviousConnect a walletNextHedge - Exit a position

Last updated 1 year ago

How to open a hedging position

In order to open a hedging position using Bumper, you need to commit the asset you wish to protect to the smart contract, and . Here are the basic steps to follow:

  • Navigate to the dApp and ensure your wallet is connected

  • Select the Market you would like to open a position in

  • Ensure ‘Hedge’ is selected in the new position box

  • Under Asset Position, decide how much of your available assets you want to protect, or click the Max button to choose all (note, if you’re depositing ETH you will need to keep some ETH in reserve to pay gas fees).

  • Next, set a floor. This is the price that your protection engages

  • Now choose a protection term. This is how long your position will be open for. Note: You can cancel at any time, but doing so will mean you won’t earn BUMP incentives.

  • In the summary box you will see:

    • an Estimated Premium for your position. The Estimated Premium is shown as a per month (p/m) %

    • the required BUMP token bond. This is the amount of BUMP tokens you must have in your wallet which are bonded into the protocol. Your bond is returned when you exit your position.

    • the trading fee for using Bumper

    • an estimated incentive paid in BUMP tokens for using the protocol.

  • If you’re happy, and ready to proceed, you may be shown a ‘PERMIT’ button if this is your first transaction

  • If you’ve submitted a PERMIT you can then select ‘CONFIRM’ to open your web wallet and complete the transaction

  • Now approve the transaction in your web3 wallet, and then wait for it to be confirmed on the blockchain

  • Once completed, you’ll see a confirmation of your transaction pop up, and you will see the new position in your ‘Positions’ summary.

Deposit Limiting There are times when the protocol will need to limit deposit sizes for both Makers and Takers in order to keep pool ratios within predefined limits. This helps to ensure that premiums are fair, healthy yields are maintained and the protocol can operate most efficiently. If the deposit alert shows while trying to open a new position reduce the size of your position

Premiums and Fees

There is a cost for protecting your crypto assets from downside volatility, and this is calculated throughout your term. See the section on for more details.

premiums
bond some BUMP tokens