Trading metrics
Long, short, gross and net wallet exposure
Long exposure generally gains when the referenced asset rises; short exposure generally gains when it falls. Gross exposure adds absolute long and short notional. Net exposure subtracts short from long under a compatible basis. Low net exposure can coexist with substantial gross risk and trading costs.
Use a concrete notional example
Hypothetical example: an account has $6,000 of long notional and $4,000 of short notional. Gross exposure is $10,000 and net exposure is $2,000 long. With $2,000 of equity, the account has five times gross exposure and one times net exposure in this simplified view.
These calculations do not establish a hedge’s effectiveness. If the long and short positions reference different markets, their prices can move differently. Even opposite positions in related instruments can have basis and funding differences.
Do not confuse a side percentage with market coverage
A long-share percentage can divide long notional by the cohort’s gross notional. It describes how the selected observed book is distributed, not the probability that the market rises. Another display might count long accounts rather than weight by notional. Those percentages can differ substantially when one large account dominates size.
Read whether spot holdings are included. A wallet short a perpetual contract can also hold spot exposure in the same asset, while a perp-only view shows just the short. Off-platform holdings may remain unknown.
Concentration survives apparent balance
A portfolio can have a near-zero net number while its largest market positions remain exposed to liquidity stress or rapid relative-price movement. Gross exposure matters for fees, funding and execution. Multiple leaders can also net against one another in a shared account while retaining distinct strategy attribution.
Review the largest market shares and effective account leverage. A capital weight assigned to one leader is not the same as its contribution to the combined exposure. A highly leveraged leader can dominate a portfolio despite a modest weight.
Keep the snapshot aligned
Combine observations only when their timestamps and scope support the comparison. If one leader’s position is fresh and another is old, a calculated net can create an apparent hedge that no longer exists. Preserve delayed or unavailable fields. In WalletFollow, use as-of and coverage explanations when writing an account or portfolio risk note.
- Gross equals absolute long plus short exposure.
- Net expresses the directional difference on a defined basis.
- Check concentration and market relationships.
- Keep account equity, scope and timestamps attached.