# CEX-DEX Delta-Neutral Trade

The following page contains video tutorial for CEX-DEX Delta-Neutral Trade: [cex-dex-delta-neutral-trade](https://docs.arkis.xyz/home/cex-dex-delta-neutral-trade "mention")

In this example we:

1. **Supply** `100 USDC`-worth of **rsETH Pendle PT** as collateral.
2. **Borrow** `100 USDC` from an Arkis Liquidity Pool.
3. **Withdraw** that USDC to our linked Binance sub-account.
4. **Open** a short ETH-USDT perpetual to hedge the rsETH exposure → delta-neutral.
5. Observe how Arkis Margin Engine rewards neutrality, then test short-bias and long-bias variants to see Risk-Factor penalties.

Collateral stress tests for rsETH Pendle PT is 20% in this trade example.

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### 1  Borrow USDC Against rsETH PT

1. **Use rsETH PT as collateral**
   * Amount: 100 USDC notional
2. **Borrow USDC**
   * Borrowed: 100 USDC

<figure><img src="https://3978617066-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FJHNY2cWUA8ooxRaSq4DZ%2Fuploads%2FkggQCB6daoGxungq61jb%2FScreenshot%202025-06-01%20at%2018.52.01.png?alt=media&#x26;token=c2e36119-c264-4666-8eb7-ac5c963cc2d1" alt=""><figcaption></figcaption></figure>

At position origination, our Stress-Tested Portfolio value is the following:&#x20;

* *PT rsETH-26JUN 2025*:
  * 0.0394 PT rsETH = 100$ \* (1 - 0.2) = 80 USDC
* *100 USDC* (borrowed assets) = 100 USDC
* **Total Stress-Tested Portfolio Value**: 80 USDC + 100 USDC = 180 USDC&#x20;
* **Risk Factor**: 180/100 = 1.8

<figure><img src="https://3978617066-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FJHNY2cWUA8ooxRaSq4DZ%2Fuploads%2FV3crGnsTCNVPd43qlkrZ%2FScreenshot%202025-06-01%20at%2018.55.37.png?alt=media&#x26;token=18b142fb-fcd6-423b-b3df-6f9054362dc7" alt=""><figcaption></figcaption></figure>

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### 2  Withdraw to Binance Sub-Account

*The Asset Manager asks to link their Binance DMA sub-account to the Margin Account and withdraw 100 USDC to the Binance sub-account.*&#x20;

<figure><img src="https://3978617066-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FJHNY2cWUA8ooxRaSq4DZ%2Fuploads%2FRP4hjAcW2O7IJQ0NiX0g%2FScreenshot%202025-06-01%20at%2018.57.58.png?alt=media&#x26;token=55e67694-fb94-4a76-9bd6-40d0790f2440" alt=""><figcaption></figcaption></figure>

The Risk Factor is unchanged because Margin Engine starts seeing withdrawn USDC on the Binance sub-account.&#x20;

<figure><img src="https://3978617066-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FJHNY2cWUA8ooxRaSq4DZ%2Fuploads%2FkaPxeMK4JxiSdMv4dZmU%2FScreenshot%202025-06-01%20at%2018.59.12.png?alt=media&#x26;token=bbc7c08d-2f25-4a63-8c9a-b7dde1cb5052" alt=""><figcaption></figcaption></figure>

***

### 3  Make the Position Delta-Neutral

1. On Binance, place a **short ETH-USDT perpetual** sized to match the rsETH PT’s ETH exposure.
2. Arkis Margin Engine starts seeing short perpetual position and Risk Factor improves as position is now delta-neutral.

<figure><img src="https://3978617066-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FJHNY2cWUA8ooxRaSq4DZ%2Fuploads%2FxjQ4Od5iDcuhEghDEqGt%2FScreenshot%202025-06-01%20at%2019.00.54.png?alt=media&#x26;token=c477526e-866b-430e-a389-791feca2fbdc" alt=""><figcaption></figcaption></figure>

However, now Margin Engine v2 of Arkis starts seeing a short position and understands that it is delta-neutral because. Now, instead of applying only a negative stress test of collateral (Margin Engine v1), Margin Engine applies both positive and negative stress tests to the whole portfolio. Let's see how it works:

<figure><img src="https://3978617066-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FJHNY2cWUA8ooxRaSq4DZ%2Fuploads%2FcLHKgdhOquzjldricX5V%2FScreenshot%202025-06-01%20at%2019.20.27.png?alt=media&#x26;token=a00b79be-0d29-40aa-ae1c-aa492fdd124c" alt=""><figcaption></figcaption></figure>

As you can see, that short perpetual position (ETH-PERP) has a negative impact on the Positive Scenario and a positive impact in the Negative Stress-Test Scenario. It makes the portfolio delta-neutral and balanced relative to borrowed USDC.

{% hint style="warning" %}
Without changing the total value of assets inside the Margin Account + Binance Sub-account, the Asset Manager can increase the Risk Factor by making the position delta-neutral.
{% endhint %}

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### 4  Takeaways

* **Delta-Neutral Wins:** RF ≈ 2 when hedged; lower when biased.
* **Unified View:** Arkis sees rsETH PT on-chain **and** ETH-perp off-chain, so liquidation logic spans both venues.
* **Capital Efficiency:** Borrowed USDC doubles as margin on Binance—no external capital drag.
* **Penalty for Directional Risk:** Both long and short bias reduce RF, encouraging safer portfolios for lenders.