> For the complete documentation index, see [llms.txt](https://bubble-bot.gitbook.io/bubblebot-guide/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://bubble-bot.gitbook.io/bubblebot-guide/hedge-risk/hedge-risk-mitigation.md).

# Hedge Risk Mitigation

Speculate on pegged assets, multifold your earning

This section considers the influence of trading fees on risk-neutral pricing, denoted by the symbol.

<figure><img src="https://3250154064-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FNhmBg4RAYhGReQsMVRuB%2Fuploads%2F9ubQeFyzVdK0bk1US7sv%2FBUBBLE%20BOT%205%20(1).png?alt=media&amp;token=eee308ae-90ff-4d21-9e11-b0224c767466" alt=""><figcaption></figcaption></figure>

Using $$\phi\_k$$to represent the portion of the hedge acquired for a specific strike in a particular epoch, the return from "selling" it can be expressed as:

$$
APR\_k=12\times\left(\frac{1-c}{1-\phi\_k}\right),
$$

In order to maintain a no-arbitrage environment, the following relationship must hold:

$$
P\_k=\frac{\phi\_k}{1-c}.
$$

Please note that while the Annual Percentage Rate (APR) for selling a hedge may appear to be relatively high, there is always a probability $$P\_k$$ that the seller's entire position could be liquidated.