> For the complete documentation index, see [llms.txt](https://decoder-1.gitbook.io/decoder-farmer/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://decoder-1.gitbook.io/decoder-farmer/farms/delta-neutral-lighter-and-paradex.md).

# 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:**

1. Select a market that exists on both Lighter and Paradex
2. Set your take profit and stop loss levels
3. Choose opposite directions (e.g., Long on Lighter, Short on Paradex)
4. The system will place a limit order on the first exchange
5. Once filled, it will immediately place a market order on the second exchange

<figure><img src="/files/4EKJ1GVkBFMkz0GDIUNv" alt=""><figcaption></figcaption></figure>

#### **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

<figure><img src="/files/pWdwDpREYLkn46w34dQ4" alt=""><figcaption></figcaption></figure>

<figure><img src="/files/1qiA6THTC3lk9vOAYj2B" alt=""><figcaption></figcaption></figure>

#### **Getting Paradex Credentials:**

1. Visit [app.paradex.trade/r/decoder](https://app.paradex.trade/r/decoder) (referral code: **decoder**)
2. Create an account or sign in
3. 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.
4. After creating the subkey, copy the **Subkey Private Key** and the **Subkey Public Key**.
5. 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.

{% hint style="danger" %}
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](https://learn.microsoft.com/en-us/previous-versions/windows-server/it-pro/windows-server-2019/remote/multipoint-services/set-the-date-time).

**Important:** Always test with small amounts first and ensure you understand the risks involved in delta neutral trading.
{% endhint %}