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
BTCC Futures XRP-WEEKLY 0.061 0.50 13,775,791 10,327,093 1/7/2022
OKX (Futures) XRP-USD-221230 0.316 0.09 621,240 2,399,863 30/12/2022
Huobi Futures XRP_CW 0.247 2.78 342,300 2,318,088 1/7/2022
OKX (Futures) XRP-USDT-221230 -0.332 0.11 11,425 2,263,321 30/12/2022
Binance (Futures) XRPUSD_220930 0.559 0.03 1,146,840 2,119,418 30/9/2022
Huobi Futures XRP_NW 0.574 2.78 238,800 2,028,328 8/7/2022
Huobi Futures XRP_NW 0.502 2.94 275,770 1,736,803 1/7/2022
OKX (Futures) XRP-USDT-220701 0.238 0.08 5,035 1,696,112 1/7/2022
OKX (Futures) XRP-USDT-220708 0.259 0.09 1,370 1,553,367 8/7/2022
OKX (Futures) XRP-USD-220701 0.165 0.06 497,180 1,435,877 1/7/2022
OKX (Futures) XRP-USD-220708 0.413 0.07 335,890 1,371,724 8/7/2022
Binance (Futures) XRPUSD_221230 0.408 0.06 217,330 322,362 30/12/2022
FTX (Derivatives) XRP-0930 0.894 0.13 657,160 142,299 30/9/2022

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
Bitrue (Futures) XRP-USDT 0.156 0.08 -0.00648 113,235,046 140,682,797
Binance (Futures) XRPUSDT 0.073 0.03 -0.00285 70,400,494 233,270,337
FTX (Derivatives) XRP-PERP 0.216 0.02 -0.08400 48,390,039 37,575,646
AAX Futures XRPUSDTFP 1.863 0.09 -0.02136 46,093,250 65,942,935
Bybit XRPUSD 0.000 0.03 0.00070 43,972,909 71,392,918
Bybit XRPUSDT 0.028 0.03 0.00670 29,924,987 57,305,734
ZBG Futures XRP_USDT -0.065 0.19 0.01000 23,028,715 4,646,661
Binance (Futures) XRPUSD_PERP 0.027 0.03 -0.03299 13,056,420 57,392,447
Bitget Futures CMT_XRPUSDT -0.026 0.07 -0.00459 11,812,686 50,683,965
Phemex (Futures) XRPUSD 0.111 0.03 0.01000 11,334,597 66,658,142
BTCC Futures XRPUSDT 0.044 0.49 0.00000 9,566,522 7,172,191
OKEx (Futures) XRP-USDT-SWAP -0.017 0.05 -0.01923 9,264,748 56,737,392
C-Trade XRPUSDT 0.112 0.03 0.01000 7,717,013 147,719
BitZ (Futures) 104 0.016 0.17 0.00000 6,801,657 107,361,215
OKEx (Futures) XRP-USD-SWAP 0.081 0.06 -0.02160 6,399,920 30,361,988
Prime XBT XRP/USD 0.000 0.28 0.00000 6,064,400 9,425
Prime XBT XRP/BTC 0.000 5.56 0.00000 5,516,500 255
Huobi Futures XRP-USDT 0.056 2.78 0.01000 4,805,997 8,111,333
BitMEX XRPUSD -0.119 0.02 0.01000 4,437,237 3,161,817
Bitforex (Futures) SWAP-USD-XRP -0.306 0.28 0.00649 2,984,482 59,399,891
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
Gate.io (Futures) XRP_USDT 0.056 25.00 -0.00250 2,509,849 2,445,958
Huobi Futures XRP-USD 0.037 2.78 -0.00519 2,487,230 807,801
Bitfinex (Futures) XRPF0:USTF0 0.013 0.13 0.00000 1,900,953 1,172,461
Crypto.com Exchange (Futures) XRPUSD-PERP 0.081 0.11 -0.00002 1,723,091 1,723,091
Kraken (Futures) PI_XRPUSD -0.830 0.17 -253.90289 1,582,792 525,918
MEXC Global (Futures) XRP_USDT 0.028 0.03 0.00200 1,554,100 3,832,392
ZB (Derivatives) XRP_USDT 0.644 0.81 -0.01630 1,537,843 23,430,757
Bitget Futures XRPUSD 0.000 0.06 -0.09975 1,093,603 2,391,539
Hopex XRPUSDT 77.893 0.00 0.00000 1,045,340 0
Deribit XRP_USDC-PERPETUAL 0.084 0.11 -0.00263 732,989 85,545
Binance (Futures) XRPBUSD 0.055 0.06 -0.01478 708,905 23,632,319
CoinFLEX (Futures) XRP-USD-SWAP-LIN 0.000 0.11 -0.00080 506,256 94
AscendEX (BitMax) (Futures) XRP-PERP -0.058 0.00 -0.01367 352,718 2,129,741
BitZ (Futures) XRP_USDT 0.000 0.23 0.00000 338,754 1,975,274
CoinEx (Futures) XRP-USDT 0.056 0.03 -0.02326 196,641 1,331,854
BaseFEX XRPXBT 1.353 3.07 0.01000 97,774 975,600
Gate.io (Futures) XRP_USD 6.640 50.00 0.01000 11,266 167
WOO Network (Futures) PERP_XRP_USDT -0.003 0.06 -0.00116 1,977 49,514
MXC (Futures) XRP_USD -0.067 0.47 -0.04430 0 1,268,353,797
CoinTiger (Futures) XRPUSDT 0.145 0.03 -0.00268 0 69,988,348
Biki (Futures) 8 -0.062 0.32 0.10041 0 52,805,491
BTCEX (Futures) XRP-USDT-PERPETUAL -0.111 0.31 0.01000 0 12,347,271
GMO Japan (Futures) XRP_JPY 0.000 0.05 0.00000 0 11,071,698
MyCoinStory XRPUSDT_QUANTO_PERP -0.281 0.00 0.18486 0 7,725,393
HBTC (Futures) XRP-SWAP-USDT -0.012 0.11 -0.01304 0 2,388,540
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 0.11 -0.04958 0 687,452
BTSE (Futures) XRPPFC 0.170 0.69 0.00000 0 287,225
Stormgain Futures XRP-PERPUSDT 0.000 0.09 0.00400 0 165,962
HBTC (Futures) XRP-SWAP -0.063 0.01 0.02477 0 150,176
BHEX (Futures) XRP-SWAP-USDT 0.021 0.15 0.01808 0 53,656
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 45,604
Bibox (Futures) 4XRP_USDT 0.000 0.03 0.00000 0 11,940
Bit.com (Futures) XRP-USDT-PERPETUAL -0.177 0.18 0.00000 0 6,232
MCS XRPUSDT_QUANTO_PERP -0.804 0.10 0.01000 0 98
Drift Protocol XRP-PERP 0.000 0.00 0.06224 0 0

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-0930 -0.005 0.17 695,881 17,036 30/9/2022

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 0.065 0.10 -0.09840 9,766,478 3,855,773
Gate.io (Futures) ALT_USDT -3.160 2.63 0.36770 31,361 1,049
BTSE (Futures) BBAXPFC -0.277 0.41 0.00000 0 186,125

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 0.020 0.10 0.00000 169,935 11,106
Bitfinex (Futures) TBTCDOMF0:USTF0 0.060 0.17 -0.11774 163,844 109,181
Binance (Futures) BTCDOMUSDT -0.026 0.01 0.06240 9,752 9,387,599
BTSE (Futures) BDIPFC -0.143 0.30 0.00000 2,482 41,193

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.