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-211231 -2.668 0.03 44,827 63,667,705 31/12/2021
OKEx (Futures) XRP-USD-211231 -2.519 0.02 11,110,890 36,551,736 31/12/2021
Binance (Futures) XRPUSD_220325 -6.049 0.02 6,149,770 15,951,120 25/3/2022
Binance (Futures) XRPUSD_211231 -3.279 0.02 15,684,120 15,574,205 31/12/2021
OKEx (Futures) XRP-USD-211022 -0.207 0.02 987,240 14,810,141 22/10/2021
OKEx (Futures) XRP-USD-211029 -0.528 0.07 880,990 14,261,357 29/10/2021
OKEx (Futures) XRP-USDT-211022 -0.245 0.07 6,233 10,996,288 22/10/2021
OKEx (Futures) XRP-USDT-211029 -0.382 0.07 3,914 10,647,649 29/10/2021
Huobi Futures XRP_CQ -0.445 0.88 6,081,020 8,814,737 31/12/2021
OKEx (Futures) XRP-USDT-220325 -5.112 0.04 16,594 6,705,775 25/3/2022
OKEx (Futures) XRP-USD-220325 -5.002 0.05 3,613,210 5,800,824 25/3/2022
FTX (Derivatives) XRP-1231 -3.212 0.12 11,864,673 3,019,014 31/12/2021

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
C-Trade XRPUSDT -0.097 0.02 0.07000 813,568,190 1,750,839
Binance (Futures) XRPUSDT -0.110 0.02 0.04822 362,394,163 903,667,472
Bybit XRPUSD -0.202 0.02 0.05450 278,007,982 465,853,744
FTX (Derivatives) XRP-PERP 0.005 0.01 0.08160 146,379,718 158,647,674
Bybit XRPUSDT -0.114 0.02 0.10940 110,515,714 201,072,158
CoinFLEX (Futures) XRP-USD-SWAP-LIN -0.009 0.07 0.00220 82,623,305 2,052,543,185
Binance (Futures) XRPUSD_PERP -0.079 0.02 0.03934 79,166,850 369,347,466
Bitforex (Futures) SWAP-USD-XRP -0.164 0.09 0.03800 51,028,095 406,337,884
BitMEX XRPUSD -0.180 0.02 0.12300 32,026,629 26,033,226
Bitget Futures XRPUSD -0.026 0.07 -0.01735 23,990,905 29,965,566
Phemex (Futures) XRPUSD -0.132 0.02 0.13291 23,379,002 14,549,443
ZBG Futures XRP_USDT -0.065 0.19 0.01000 23,028,715 4,646,661
Huobi Futures XRP-USDT -0.098 0.88 0.03978 22,470,932 124,727,670
OKEx (Futures) XRP-USDT-SWAP -0.073 0.01 0.03295 20,880,375 67,171,574
OKEx (Futures) XRP-USD-SWAP -0.015 0.02 0.04128 19,984,500 41,629,402
Bitget Futures CMT_XRPUSDT -0.009 0.05 0.05449 10,943,463 53,206,234
Huobi Futures XRP-USD -0.105 0.88 0.03038 9,422,830 35,666,411
BitZ (Futures) 104 0.016 0.17 0.00000 6,801,657 107,361,215
Kraken (Futures) PI_XRPUSD -0.123 0.08 79.78841 5,589,953 12,137,149
MEXC Global (Futures) XRP_USDT -0.114 0.22 0.06030 5,088,360 1,347,274
Prime XBT XRP/USD 0.000 0.09 0.00000 5,015,256 1,267,408
Gate.io (Futures) XRP_USDT -0.018 0.00 0.01560 4,240,000 20,267,300
Phemex XRPUSD -0.066 0.16 0.01000 2,697,170 18,080,031
Prime XBT XRP/BTC 0.000 5.26 0.00000 2,618,338 168,230
MXC (Futures) XRP_USDT -0.026 0.12 0.00000 2,514,230 2,224,183
Binance (Futures) XRPBUSD -0.080 0.02 0.04237 587,481 70,159,612
AscendEX (BitMax) (Futures) XRP-PERP -0.085 0.00 0.04334 566,779 423,983
BitZ (Futures) XRP_USDT 0.000 0.23 0.00000 338,754 1,975,274
Hopex XRPUSDT -18.258 0.00 0.00000 190,828 1,500
Gate.io (Futures) XRP_USD -0.837 0.00 0.04150 129,687 12,506
BaseFEX XRPXBT 1.353 3.07 0.01000 97,774 975,600
MXC (Futures) XRP_USD -0.067 0.47 -0.04430 0 1,268,353,797
CoinTiger (Futures) XRPUSDT -0.118 0.02 0.04825 0 270,976,367
Biki (Futures) 8 -0.062 0.32 0.10041 0 52,805,491
GMO Japan (Futures) XRP_JPY 0.000 0.04 0.00000 0 36,322,654
AAX Futures XRPUSDTFP 1.688 0.08 0.02101 0 9,646,967
MyCoinStory XRPUSDT_QUANTO_PERP -0.281 0.00 0.18486 0 7,725,393
Stormgain Futures XRP-PERPUSDT 0.000 0.09 0.00400 0 4,396,223
HBTC (Futures) XRP-SWAP-USDT -0.012 0.11 -0.01304 0 2,388,540
Bitfinex (Futures) XRPF0:USTF0 -0.194 0.03 0.00000 0 1,678,279
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
Bitfinex (Futures) XRPF0:BTCF0 -0.031 0.05 -0.04801 0 1,302,019
BTSE (Futures) XRPPFC -0.236 0.26 0.00000 0 853,773
Crypto.com Exchange (Futures) XRPUSD-PERP -0.055 0.09 0.00003 0 381,015
BHEX (Futures) XRP-SWAP-USDT 0.021 0.15 0.01808 0 158,364
HBTC (Futures) XRP-SWAP -0.063 0.01 0.02477 0 150,176
Crypto.com (Futures) XRPUSD-PERP 0.000 0.18 0.00000 0 50,173
BHEX (Futures) XRP-SWAP 0.012 0.02 0.02784 0 43,006
Bibox (Futures) 4XRP_USDT 0.000 0.02 0.00000 0 18,018

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-1231 -1.693 0.23 5,429,180 5,984,473 31/12/2021

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 0.02 -0.01200 31,813,602 35,408,971
Gate.io (Futures) ALT_USDT -3.356 0.00 0.01000 49 114,149
BTSE (Futures) BBAXPFC -1.576 0.41 0.00000 0 147,887

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 -0.025 0.05 0.00000 960,225 83,162
Bitfinex (Futures) TBTCDOMF0:USTF0 0.060 0.17 -0.11774 163,844 109,181
Binance (Futures) BTCDOMUSDT -0.008 0.02 0.01000 4,820 9,437,558
BTSE (Futures) BDIPFC -0.095 0.28 0.00000 4,178 17,889

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.