Automating delta-neutral strategies removes the complexity. It doesn't remove the risk. "Delta-neutral" doesn't mean risk-free. It just means you're hedging price direction. The rest of the risks are still there: 1/ Funding flips You're collecting yield until sentiment shifts. Rates that were paying 80% can turn negative fast. Now you're paying to hold the position instead of collecting. 2/ Liquidation risk Example: • You open a BTC long on one exchange, short on another • BTC dumps hard, your long gets liquidated • BTC reverses immediately after • Your short stays open • The entire setup turns into a directional loss A stop-loss helps, but if the price moves fast enough, it might not save you (think Oct 10, 2025). 3/ Gamma risk Your long and short start balanced, but as price moves they drift apart. Without constant rebalancing, you're carrying a directional position without realizing it. 4/ Counterparty risk You're spread across multiple exchanges at once. If one freezes withdrawals or goes down, your whole setup breaks. FTX was a reminder that these scenarios aren't theoretical.

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