Neutral Trade Vaults — Short-term VS Long-term investment
While some ape into meme coins to earn quick returns, the world’s wealthiest are patient and lets their investments compound to secure their future for years to come.
In this article, we’ll explore why Neutral Trade Vaults should be viewed as a long-term investment strategy, rather than a quick buck.
Short-term risks
Imagine this: you’re a regular trader or DeFi user, and you come across a Neutral Trade Vault offering an impressive 60–80% APY. Excited, you deposit your available USDC (or SOL/ETH/BTC; coming soon), only to notice that your current balance has dropped by around 0.3%. Panic sets in, and you might be tempted to withdraw your funds immediately to avoid further losses — but that would be a big mistake.
There are several reasons why this might happen, and neither is alarming if your goal is long-term growth:
- Positioning Costs: After your deposit, your balance may dip slightly because our quants and traders are opening new positions using your funds. This process incurs minimal expenses but is inevitable for strategy execution.
- Market Volatility: There’s market fluctuations on JLP virtual price vs market price, which can cause temporary balance swings.
- Rebalance criteria: Rebalancing our hedges too frequently would incur trading costs that affects our performance. Therefore, we allow a parameterized amount of market exposure on JLP before the system rebalance the hedges. We believe this is the most cost effective way while taking minimal market risks.
Take a close look at the chart, particularly the red line, steadily trending upwards. A quick analysis reveals a clear and consistent upward trajectory.
But if you zoom in on a shorter time frame, you’ll notice a lot of noise — ups and downs that can make the trend seem unpredictable. The reality is that market conditions fluctuate, as do JLP fees. This is why the JLP Delta Neutral Vault isn’t suited for short-term investments. Over time, the noise fades, and the long-term growth pattern becomes clear.
Long-term pros
If you’re considering depositing in the JLP Delta Neutral Vault for a period of 2–3 months or longer, you’ll benefit from:
- Up-Only Yield — Consistent, positive growth.
- Market-Leading APY — the best yield on USDC available in the market.
- Stress-Free Investing — Peace of mind with a low-risk, optimized strategy.
As of today, the vault has been launched publicly for 18 days, and early JLPDN depositors are already enjoying exceptional returns.
Invest smart. Let your capital grow effortlessly.
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