Delta Neutral - Lighter & Paradex
What is Delta Neutral Trading?
Delta neutral trading involves taking opposite positions on the same asset across different exchanges to profit from price differences while minimizing directional risk.
How it Works:
Select a market that exists on both Lighter and Paradex
Set your take profit and stop loss levels
Choose opposite directions (e.g., Long on Lighter, Short on Paradex)
The system will place a limit order on the first exchange
Once filled, it will immediately place a market order on the second exchange
Strategy Benefits:
Reduces directional risk by hedging positions
Profits from price discrepancies between exchanges
Automated execution reduces manual intervention
Can be used in both trending and ranging markets
Risk Considerations:
Execution risk if second order fails to fill
Funding costs on both exchanges
Price slippage on market orders
Exchange downtime or connectivity issues
Setup Requirements:
Valid API credentials for both Lighter and Paradex
Sufficient balance on both exchanges
Same trading pair available on both exchanges
Proper Discord key for notifications
Getting Paradex Credentials:
Visit app.paradex.trade/r/decoder (referral code: decoder)
Create an account or sign in
Open the Settings app in Paradex and create a Subkey for trading. Do not create a read-only subkey.Subkeys allow trading from your account without deposit/withdraw permissions.
After creating the subkey, copy the Subkey Private Key and the Subkey Public Key.
Click your profile in Paradex to open the account dialog. Copy the Paradex Address shown there. This is your Main Account L2 Address required by this app.
Time Synchronization Note:
If you encounter API errors, ensure your system time is correctly synchronized. The Paradex API may reject requests if there's a time difference. For Windows users, see how to set the date and time.
Important: Always test with small amounts first and ensure you understand the risks involved in delta neutral trading.
Last updated