Markets and payoffs
Power perps
A power perp on a coin with power p is a market whose price is proportional to the coin's price to the power p. Stratos lists:
| Market | Pays | ETH +10% | ETH −10% | ETH +20% | ETH −20% |
|---|---|---|---|---|---|
| ETH², HYPE² | (S ÷ S₀)² − 1 | +21% | −19% | +44% | −36% |
| ETH³, HYPE³ | (S ÷ S₀)³ − 1 | +33% | −27% | +73% | −49% |
| Plain coin, for comparison | (S ÷ S₀) − 1 | +10% | −10% | +20% | −20% |
S₀ is the coin's price when you opened and S the price now. These are the returns on your position size, before leverage and funding. With 3x leverage on $200 of collateral you hold a $600 position, so the dollar P&L is $600 × the figure above, and the return on your collateral is 3× it.
Convexity means the payoff is asymmetric: a 20% rise in ETH gains you 44% on ETH², but a 20% fall loses only 36%. The further the move, the bigger the gap. That asymmetry is what you pay funding for.
Longs and shorts
A long holds the power payoff above: it gains more than a plain position when the coin rises and loses less when it falls. It pays funding.
A short is the mirror image: it gains (S₀ ÷ S)-style when the coin falls, loses faster when it rises, and receives funding. A short's loss has no ceiling in principle, which is why shorts have a lower leverage limit than longs on volatile coins and why liquidation matters more for them.
Mark price vs index price
The app shows two prices for each market:
- Index is the coin itself, from the oracle (ETH at $2,120, say). Orders, liquidations and knock-outs trigger on the index.
- Mark (called "ETH² price" in the app) is the price of the product you hold. It starts equal to the coin's price when the market is listed, then moves as the square (or cube) of the coin and drifts down slowly by the funding rate. Your P&L follows the mark.
Right after listing the two prices look alike, which is confusing until you watch them move: when ETH is 2% below its listing price, ETH² is about 4% below. The ETH² vs ETH button on the chart shows both on one axis.
Technically: mark = NF × (S ÷ ref)ᵖ × ref, where ref is the coin's price at listing and NF is the normalization factor, a number that starts at 1 and decays continuously at the funding rate. The decay is how funding is charged (see Funding).
Straddles
A straddle pays on the size of a move, up or down. Its payoff on size N, with x = S ÷ centre, is
N × [ xᵖ − p(x − 1) − 1 ]
which is zero at the centre and positive on both sides. For the squared straddle that's simply (x − 1)²: a 20% move either way pays +4% of size; a 50% move pays +25%. The cubed straddle is steeper: about +12.8% on a +20% move and +11.2% on −20%.
A long straddle is a bet that the coin moves; it pays funding. A short straddle collects funding and loses if the coin moves far. The centre is the price when you open, and it stays yours: nothing resets it for you. As the price moves away from the centre, the straddle leans with the move (a squared straddle 20% above its centre gains like a 0.4× long on the next small move). Tap Re-centre to bank its P&L into your collateral and centre it on today's price, so it's back to no direction and gains on the next move either way. A profit you bank that way pays the same share a close would; there's no trading fee.
Funding is charged continuously. A squared straddle's funding is the same wherever the price is (its payoff curves the same everywhere). A cubed straddle's curves more as the price rises, so its funding scales with the price over its centre: 20% higher, 20% more funding.
Straddles have no linear leg, so they're cheaper to hold than a power long: the ETH² straddle's rate is roughly three quarters of ETH²'s.
Coins
ETH and HYPE at launch. HYPE is more volatile, so its markets run at half the leverage of ETH's and with a wider gap budget (see Safety).
Market hours
Always on. Prices come from Hyperliquid's oracle (a stake-weighted median of exchange prices), with Derive's index as a cross-check. If fewer than two price sources are fresh, opens pause and closes stay available at the last good price.