Quickstart.
Pick a side, pay once, hold it.
Pick a side.
- Long gains as the index falls.
- Short gains as the index rises.
Buy it.
- Open a market and check the price. Long and short add up to about $1.
- Buy your side, and the token lands in your wallet.
- Sell any time, or hold it to settlement.
Example.
US high yield credit, range −30% to +20%. Ana buys short at 40¢. The index ends up 5%, which is 70% of the way up the range. Short pays 70¢ and long pays 30¢. Ana makes 30¢ a share.
What you make depends on the price you paid, not only on being right.
Risks.
- Your side can go to zero. You lose what you paid, never more.
- Prices move before settlement, so selling early can mean a loss.
- The index is not your portfolio. They can move differently.
- A quoted price does not guarantee you can sell in size.