How to hedge XRP

XRP is XRP token.

As XRP is a volatile asset, in certain instances it will require hedging.

The best method of hedging XRP is to use crypto derivatives.
There are multiple of the exchanges serving futures and perpetual swaps.

Choose from the list of hedging options

XRP Futures

When required to hedge the position for the mid-term period (weeks to months) you can use futures.

Exchange Symbol Premium (-)
Discount (+)
Spread Open Intrest 24h Volume Expiry Date
OKEx (Futures) XRP-USDT-210924 -0.016 0.07 20,096 104,982,112 24/9/2021
Huobi Futures XRP_CQ -0.219 0.07 5,402,740 45,750,634 24/9/2021
OKEx (Futures) XRP-USD-210924 -0.027 0.19 4,599,800 44,529,387 24/9/2021
Binance (Futures) XRPUSD_210924 -0.103 0.03 13,497,330 36,750,102 24/9/2021
Binance (Futures) XRPUSD_211231 -1.773 0.07 2,265,750 17,787,858 31/12/2021
OKEx (Futures) XRP-USD-210730 -0.043 0.07 1,034,230 15,835,693 30/7/2021
OKEx (Futures) XRP-USDT-210730 -0.105 0.05 5,515 13,176,697 30/7/2021
OKEx (Futures) XRP-USD-210806 0.062 0.07 747,910 10,513,934 6/8/2021
OKEx (Futures) XRP-USDT-210806 -0.002 0.12 2,765 10,170,709 6/8/2021
OKEx (Futures) XRP-USD-211231 -1.234 0.06 2,475,280 9,729,940 31/12/2021
OKEx (Futures) XRP-USDT-211231 -1.540 0.08 13,139 8,426,610 31/12/2021
Huobi Futures XRP_NQ 0.023 0.05 6,826,480 7,840,920 24/9/2021
FTX (Derivatives) XRP-0924 -0.248 0.26 8,521,962 5,252,264 24/9/2021
Huobi Futures XRP_CW -0.082 0.15 508,330 5,037,999 30/7/2021
Huobi Futures XRP_NW 0.070 0.15 426,660 3,802,186 6/8/2021
Huobi Futures XRP_NW 0.228 0.07 711,840 2,199,807 30/7/2021

XRP Perpetual Swaps

Short position for indefinite time is also possible by using perpetual.
Moreover you can earn swaps in particular cases.

Exchange Symbol Premium (-)
Discount (+)
Spread Funding Rate Open Intrest 24h Volume
Binance (Futures) XRPUSDT 0.034 0.03 0.01000 184,052,050 3,123,956,062
Bybit XRPUSD 0.055 0.01 0.01000 118,180,176 1,506,293,806
FTX (Derivatives) XRP-PERP -0.559 0.03 0.06000 66,833,549 288,599,695
Binance (Futures) XRPUSD_PERP -0.029 0.01 0.01000 34,422,230 669,331,917
Bybit XRPUSDT 0.028 0.01 0.01000 27,565,838 523,733,508
ZBG Futures XRP_USDT -0.065 0.19 0.01000 23,028,715 4,646,661
Huobi Futures XRP-USDT 0.010 0.01 0.01000 20,027,105 441,072,708
OKEx (Futures) XRP-USD-SWAP -0.063 0.11 0.04061 13,285,460 80,065,044
BitZ (Futures) XRP_USDT 0.110 0.23 0.00000 12,960,140 167,473,261
BitMEX XRPUSD 0.055 0.01 0.08560 12,705,126 64,163,646
Huobi Futures XRP-USD -0.003 0.01 0.00671 10,943,960 100,469,522
OKEx (Futures) XRP-USDT-SWAP -0.032 0.04 0.03097 10,739,556 178,484,186
Bitget Futures XRPUSD -0.137 0.16 -0.11101 9,810,208 88,421,838
Bitget Futures CMT_XRPUSDT 0.027 0.01 0.00192 7,821,346 98,800,396
BitZ (Futures) 104 0.016 0.17 0.00000 6,801,657 107,361,215
Phemex (Futures) XRPUSD 0.028 0.01 0.01000 5,904,967 99,626,285
Bitforex (Futures) SWAP-USD-XRP -0.068 0.14 0.00500 3,716,540 8,553,330
Phemex XRPUSD -0.066 0.16 0.01000 2,697,170 18,080,031
MXC (Futures) XRP_USDT -0.026 0.12 0.00000 2,514,230 2,224,183
MEXC Global (Futures) XRP_USDT -0.095 0.45 0.00790 2,152,520 3,879,210
Gate.io (Futures) XRP_USDT 0.124 0.00 0.01000 2,069,934 42,219,613
Kraken (Futures) PI_XRPUSD 0.014 0.25 -3.53292 1,524,596 8,112,874
Gate.io (Futures) XRP_USD 1.593 0.00 0.33030 667,639 41,942
Hopex XRPUSDT -18.258 0.00 0.00000 190,828 1,500
BaseFEX XRPXBT 1.353 3.07 0.01000 97,774 975,600
AscendEX (BitMax) (Futures) XRP-PERP -0.237 0.00 0.00307 92,187 727,053
CoinFLEX (Futures) XRP-USD-SWAP-LIN 0.000 0.50 0.00020 4 126,233
MXC (Futures) XRP_USD -0.067 0.47 -0.04430 0 1,268,353,797
CoinTiger (Futures) XRPUSDT 0.018 0.03 0.01000 0 938,113,374
Biki (Futures) 8 -0.062 0.32 0.10041 0 52,805,491
GMO Japan (Futures) XRP_JPY 0.000 0.27 0.00000 0 34,528,467
Stormgain Futures XRP-PERPUSDT 0.000 0.13 0.00400 0 5,446,786
MyCoinStory XRPUSDT_QUANTO_PERP -0.223 0.00 0.14145 0 3,383,303
HBTC (Futures) XRP-SWAP-USDT -0.012 0.11 -0.01304 0 2,388,540
BHEX (Futures) XRP-SWAP-USDT -0.009 0.15 0.03294 0 1,708,271
Delta Exchange XRPUSDT -0.373 0.02 0.19170 0 1,474,953
Delta Exchange XRPBTC 0.518 0.62 0.01000 0 1,469,094
Bibox (Futures) 4XRP_USDT 0.000 0.00 0.00000 0 929,160
Crypto.com Exchange (Futures) XRPUSD-PERP 0.175 0.28 -0.00002 0 600,475
HBTC (Futures) XRP-SWAP -0.063 0.01 0.02477 0 150,176
BHEX (Futures) XRP-SWAP -0.074 0.04 0.03209 0 91,948
Crypto.com (Futures) XRPUSD-PERP 0.000 0.18 0.00000 0 50,173
Prime XBT XRP/BTC 0.000 8.33 0.00000 0 18,381
Prime XBT XRP/USD 0.000 0.19 0.00000 0 2,135

Future Contracts on Indexes with XRP embeded

Another way of hedging positions for the mid-term is using future contracts on indexes with the asset price as a component of the the index.

Exchange Symbol Premium (-)
Discount (+)
Spread Open Intrest 24h Volume Expiry Date
FTX (Derivatives) ALT-0924 0.615 0.26 4,271,398 14,779 24/9/2021

Perpetual Swaps on Indexes with XRP component

Sometime the best option to hedge XRP is to short with perpetual contract idefinitely.
Earning swaps can be in some cases crucial for the positioning.

Exchange Symbol Premium (-)
Discount (+)
Spread Funding Rate Open Intrest 24h Volume
FTX (Derivatives) ALT-PERP 0.025 0.11 0.01200 17,637,837 9,517,493
Gate.io (Futures) ALT_USDT -1.899 0.00 0.01000 37 5,369
BTSE (Futures) BBAXPFC 0.312 0.35 0.00000 0 140,088

Other crypto related Indexes (Perpetual Swaps)

There are several specyfic cryptocurrencies market Indexes which can be considered as a hedge for the trading positions. As Bitcoin take the lion's share of the whole market capitalisation, BTC dominance is one of the most notable.
Even more than on other markets, Bitcoin volatility influences almost all the trading pairs traded with both BTC and altcoins at the same moment.

Exchange Symbol Premium (-)
Discount (+)
Spread Funding Rate Open Intrest 24h Volume
Bitfinex (Futures) BTCDOMF0:USTF0 0.017 0.01 0.00000 952,396 230,470
Bitfinex (Futures) TBTCDOMF0:USTF0 0.060 0.17 -0.11774 163,844 109,181
BTSE (Futures) BDIPFC 0.105 0.29 0.00000 4,436 46,594
Binance (Futures) BTCDOMUSDT 0.159 0.02 -0.08084 2,074 5,722,329

Negative correlation with XRP

It can be an awkward exercise to find liquid, negatively correlated altcoins in the cryptocurrency market.

The strongest negatively correlated crypto tokens (returns in USD) in a long term are:

XAUT KNC
XRP -0.01 -0.00

Check correlations with XRP or use a custom form to check XRP changes in correlation coefficient with other token.

Stable coins or non-crypto assets can also be considered for hedging positions.