> For the complete documentation index, see [llms.txt](https://academy.horizonprotocol.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://academy.horizonprotocol.com/futures/futures-trading-on-horizon-protocol/perpetual-futures-deep-dive/delta-neutrality.md). # Delta Neutrality Delta neutral is a term used in traditional finance that describes a portfolio strategy that balances the positive and negative deltas, also known as “change over time”, so that the overall delta of the assets in question totals zero. Essentially, delta neutrality is achieved if the market’s base-unit size of all open longs and shorts are equal to each other which establishes a net change of zero regardless of how the asset’s price changes. Perpetual futures, unlike traditional futures, have no expiry date, and traders can hold their positions indefinitely as long as they maintain sufficient margin. Since there is no expiration date, perpetual delta neutrality mechanisms are required to drive the futures contract price back towards the spot market price. Maintaining delta neutrality lowers the risk from market imbalances for the stakers in the Horizon Protocol ecosystem, who provide the collateral and liquidity that are used as the counterparty of all positions in the perpetual futures platform. Without delta neutrality and mechanisms that drive neutrality, a perpetually unbalanced futures market could result in zUSD minted at the expense of the debt pool and the stakers who collateralize it. Horizon Protocol’s liquidity is designed to facilitate the ease of use for Horizon Futures by offering liquidity to smooth out the process and allow for instantaneous transactions instead of waiting for a perfectly aligned counterparty. Delta neutrality incentives are absolutely critical to the security of Horizon Protocol’s liquidity. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://academy.horizonprotocol.com/futures/futures-trading-on-horizon-protocol/perpetual-futures-deep-dive/delta-neutrality.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.