How does CMS react to a crash a thread....

Also this is late and I realize everyone forgotten about the weekend already but I was busy so better late than never

1/idk yet

1. So market nukes what do we have to do the first and foremost is what’s our collateral like everywhere and what needs collateral and what suddenly finds itself in a windfall this is the most pressing issue so has to be dealt with first. We don’t run super hot for this reason

2. Ok stuffs in flight to save the day now we need to start closing basis if the curve has flattened, this time this realized big so closing it close to parity was the most timely thing to get done so buy quarts sell spot and some perp too

3. Were gonna keep deltas from this basically turning cheap btc and eth quarterlies into outright risk deltas while this isn’t a guarantee generally you can bail yourself out of this risk when the curve untucks itself anyway and also it’s cheap cost basis for risk

4. Next we scan the board for any names we already have that are on sale and then any names we have wanted to put on but we’re either too frothy and levered and are interested bargain pricing

5. Now you’re checking those names and seeing if the perp pays you to own em or if they have a quarterly if they have a quarterly buy that as it’s cheap otherwise buy perp as it’s probably paying you and chuck your previously held btc and eth quarterly deltas against to balance

6. Now that that’s all done and the markets calming go buy the same names you wanted in spot the futures gave you the liquidity you needed and now you want the physical and to support it using same btc and eth deltas to offset

7. Now wait like 48-72 hrs hopefully for everything to calm and then trim some curve if you went long basis and it normalizes or sell your perp names you like or EFP it to more physical

8. Nothing is a guarantee but this is generally our playbook just make sure you don’t become a forced seller down there for collateral and or position sizing and worst case you just do nothing