Trailing Stop-Loss 101: Stopping out to a yield-bearing position.
The ability to seamlessly multiply your collateral is one of the best, most straightforward and potentially rewarding types of transactions that you can do in DeFi.
However, early on, as we spoke to customers and potential customers like you, we noticed a common theme. The fear of liquidation is real.
To solve this, we launched our industry-leading Stop-Loss, an Automation that protects you from the fear of liquidation. It automatically closes your position to your choice of collateral or debt, so you can go about your life regardless of large market movements.
Giving users more options to protect against losses
We then continued to keep our eyes on what customers were saying, but also what customers were doing. We noticed an interesting trend, that many Stop-Loss users would update their Stop-Loss LTVs as the price of their collateral rose.
That’s when we decided that it was time for Trailing Stop-Loss, a type of automation that moves your dynamic Stop-Loss price as the price of your collateral rises, always keeping your Stop-Loss distance (the distance between your stop price and the current market price) the same A type of automation that moves your dynamic Stop-Loss price, as the price of your collateral rises, always keeping your Stop-Loss as the price rises.
Earning after your exit
Keeping capital productive is essential, and something a bit special that we kept in mind with Trailing Stop-Loss.
What do we mean by that?
A nice hidden gem in using Trailing Stop-Loss is that Summer.fi offers users the ability to keep earning on their collateral after the Trailing Stop-Loss has been triggered.
Specifically, users will keep their collateral in AAVE or Spark, which means they will receive supply APY. This will give users a yield on their assets even after they have been stopped out.
Ready to pounce
Another benefit of this small but mighty Trailing Stop-Loss feature is that it sets users up for their next move.
Your collateral will be waiting, earning, and ready to take advantage of the next market move. All you have to do is decide when the time is right for you.
No opening a new position, no depositing collateral.. just one transaction to get back in the game.
Get started with trailing Stop-Loss
Ready to get started with trailing Stop-Loss? This brief tutorial will teach you how to set it up for your position.
Getting in touch
If you have any questions regarding Summer.fi, contact us at support@summer.fi or our social media.