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
Huobi Futures XRP_CQ 0.090 0.12 17,298,460 218,992,460 25/12/2020
OKEx (Futures) XRP-USD-201225 -0.135 0.20 9,189,140 179,494,040 25/12/2020
OKEx (Futures) XRP-USDT-201225 0.228 0.17 27,879 124,755,077 25/12/2020
Huobi Futures XRP_CW 0.074 0.17 3,027,600 43,942,672 4/12/2020
Huobi Futures XRP_NW 0.255 0.15 1,778,730 34,563,105 4/12/2020
OKEx (Futures) XRP-USD-210326 -0.739 0.15 2,773,420 24,775,542 26/3/2021
Huobi Futures XRP_NQ -0.486 0.18 2,734,990 20,346,030 26/3/2021
BitMEX XRPZ20 2.630 0.16 26,211,135 18,018,022 25/12/2020
OKEx (Futures) XRP-USD-201204 -0.018 0.20 3,698,510 17,715,914 4/12/2020
OKEx (Futures) XRP-USDT-210326 -0.415 0.18 11,153 14,850,914 26/3/2021
Huobi Futures XRP_NW 0.293 0.18 1,937,110 12,100,430 11/12/2020
OKEx (Futures) XRP-USD-201211 0.179 0.15 1,424,300 11,433,447 11/12/2020
OKEx (Futures) XRP-USDT-201204 -0.068 0.20 18,641 11,375,515 4/12/2020
FTX (Derivatives) XRP-1225 0.713 0.11 10,536,356 9,781,632 25/12/2020
OKEx (Futures) XRP-USDT-201211 0.354 0.41 6,604 7,295,233 11/12/2020
Binance (Futures) XRPUSD_201225 -0.098 0.11 0 5,442,290 25/12/2020
Binance (Futures) XRPUSD_210326 -2.829 0.16 0 2,667,233 26/3/2021
Huobi Futures XRP_NQ -0.165 0.18 1,943,720 1,160,866 25/12/2020
Kraken (Futures) FI_XRPUSD_201225 -0.033 0.20 0 1,003,091 25/12/2020

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
CoinTiger (Futures) XRPUSDT 1.413 0.12 0.01001 107,794,369 411,568,665
Binance (Futures) XRPUSDT -0.062 0.12 0.01041 106,977,946 1,375,706,759
Huobi Futures XRP-USDT 0.151 0.14 -0.15674 89,186,886 146,428,495
Bybit XRPUSD -0.033 0.12 0.01000 73,984,134 497,898,005
FTX (Derivatives) XRP-PERP -0.005 0.13 -0.03840 68,483,126 207,304,236
ZBG Futures XRP_USDT 0.034 0.13 0.01000 22,107,608 4,750,247
BitMEX XRPUSD -0.099 0.15 0.17870 19,837,405 123,736,613
Bitforex (Futures) SWAP-USD-XRP -0.081 0.16 0.00600 17,140,340 13,856,386
Bitget Futures CMT_XRPUSDT 0.000 0.15 0.00423 14,982,848 84,354,484
Binance (Futures) XRPUSD_PERP 0.081 0.17 0.01000 11,167,880 143,159,314
OKEx (Futures) XRP-USD-SWAP 0.098 0.13 -0.00575 9,374,430 100,000,507
BitZ (Futures) 104 0.016 0.17 0.00000 6,801,657 107,361,215
Phemex (Futures) XRPUSD 0.000 0.17 0.05295 6,733,407 19,277,730
MXC (Futures) XRP_USDT -0.130 0.26 0.01000 4,911,083 29,681,820
Kraken (Futures) PI_XRPUSD 0.364 0.13 196.18565 3,713,821 34,384,962
Prime XBT XRP/USD 0.000 0.16 0.00000 3,187,955 21,063,054
Phemex XRPUSD -0.066 0.16 0.01000 2,697,170 18,080,031
Bitget Futures XRPUSD -0.016 0.17 0.00054 2,482,754 2,063,749
Prime XBT XRP/BTC 0.000 3.03 0.00000 839,225 1,273,341
Hopex XRPUSDT 0.084 0.00 0.00000 638,043 89,030,921
Gate.io (Futures) XRP_USD -0.357 0.00 0.03590 331,658 602,197
BaseFEX XRPXBT 1.353 3.07 0.01000 97,774 975,600
Huobi Futures XRP-USD 0.078 0.11 0.01000 0 199,929,104
OKEx (Futures) XRP-USDT-SWAP 0.074 0.15 -0.00696 0 110,766,242
Biki (Futures) 8 0.004 0.23 0.01184 0 46,071,276
GMO Japan (Futures) XRP_JPY 0.000 0.62 0.00000 0 30,133,680
Gate.io (Futures) XRP_USDT -0.130 0.00 0.04670 0 4,512,511
HBTC (Futures) XRP-SWAP-USDT -0.374 0.13 0.06515 0 4,266,687
MyCoinStory XRPUSDT_QUANTO_PERP -0.084 0.00 0.01000 0 2,500,449
Delta Exchange XRPUSDT -0.249 0.12 0.04900 0 636,312
Delta Exchange XRPBTC 0.123 0.13 0.01000 0 380,607
HBTC (Futures) XRP-SWAP 0.031 0.18 0.03961 0 285,522
BHEX (Futures) XRP-SWAP 0.108 0.23 0.00412 0 27,563

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-1225 0.581 0.17 132,181 1,392,243 25/12/2020
BTSE (Futures) BBAXZ20 0.492 0.61 34,735 29,331 25/12/2020
BTSE (Futures) BBAXH21 -2.148 0.75 22,404 21,181 26/3/2021

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 0.133 0.19 -0.07440 5,637,828 12,849,773
Gate.io (Futures) ALT_USDT 2.159 0.00 0.01000 1,277 2,050

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) TBTCDOMF0:USTF0 -0.048 0.13 0.00000 65,603 3,459
BTSE (Futures) BDIPFC -0.083 0.67 0.00000 6,764 23,395

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:

KNC
XRP -0.01

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.