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title: Delta Neutral
description: Page on Vedang Vatsa's site: https://veda.ng/glossary/delta-neutral
canonical: https://veda.ng/glossary/delta-neutral
last_updated: 2026-10-03
type: text/markdown
---
# Delta Neutral

Source: https://veda.ng/glossary/delta-neutral
Author: Vedang Vatsa (https://veda.ng/about)

Delta neutral means a book with no net bet on price direction, so you try to earn other yields. Long 1 ETH spot and short 1 ETH in perpetuals. A $100 spot gain is a $100 futures loss. What you keep is funding, when perpetuals trade above spot and longs pay shorts.

The same idea isolates options theta, futures basis, or volatility. Directional trading becomes a yield harvest. Risk moves to funding flips, messy entry and exit on both legs, exchange failure, and imperfect hedges. If ETH rips 20%, option and perpetual deltas drift and you must rebalance. These books are common in crypto because directional drawdowns are violent while funding and basis often stay attractive. Delta neutral describes a portfolio or position structured to have zero net directional exposure to price movement, allowing traders to profit from factors other than price direction. The core concept: if you're long 1 ETH in spot and short 1 ETH equivalent in perpetual futures, price changes cancel out, a $100 gain on the spot position is offset by a $100 loss on the short (and vice versa). Delta neutral strategies isolate specific yield sources: funding rates, options theta decay, basis between spot and futures, or volatility itself. The approach transforms directional trading into yield farming. Delta near zero means the book does not move 1:1 with the underlying. Crypto basis trades try to stay there: long spot, short perp, or the reverse.

Glossary index: https://veda.ng/glossary