# Strategy 4 : Farming with Leverage : Hedging
### Holding Multiple Positions in a Single Farming Pool
KLEVA Protocol is a DeFi Protocol to help Farmers maximize their Farm Yields by utilizing Leverage. Farmers can implement numerous strategies based on different methods of utilizing Leverage and Tokens to Farm with. Strategy 4 focuses on implementing Hedging by opening 2 Farming Positions. It has to be first noted that with KLEVA Protocol, Farmers can open multiple Farming Positions on the same Farming Pool. For example, when Jennis wishes to farm in KLAY-WEMIX Pool, he can open multiple Farming Positions, varying in Leverage Multiple or type of Borrowed Asset.
Example : Jennis wants to open multiple Farming Positions in KLAY-WEMIX Pool
* Assumption : 1 WEMIX = 10 KLAY
* Position 1 : 3.0x Leverage, Jennis's Equity : 100 WEMIX, Borrowed Asset : 2,000 KLAY
* Position 2 : 3.0x Leverage, Jennis's Equity : 1,000 KLAY, Borrowed Asset : 200 WEMIX
* Position 3 : 2.0x Leverage, Jennis's Equity : 100 WEMIX, Borrowed Asset : 1,000 KLAY
* Position 4 : 2.0x Leverage, Jennis's Equity : 1,000 KLAY, Borrowed Asset : 100 WEMIX
### Hedging
By holding multiple Farming Positions in the same Farming Pool, Farmers can Hedge their Farming Positions, reducing risk. In order to Hedge, Farmers must open Farming Positions in a Stablecoin Pool. In this case, Farmers can maintain risk level of farming in Stablecoin Pools, while expecting a much higher APR.
Assumptions :
1. 1 WEMIX = 20 KUSDT
2. Jennis wishes to farm in WEMIX-KUSDT Pool
3. Jennis holds both WEMIX and KUSDT
4. Jennis wants to utilize 3.0x Leverage
#### 1) Position 1
* Equity Value : 10 WEMIX
* Debt Value : 400 KUSDT
* Position Value : 30 WEMIX or 600 KUSDT
* Farming Position : \[15 WEMIX : 300 KUSDT]
* Long Position on 15 WEMIX
* Short Position on 100 KUSDT
#### 2) Position 2
* Equity Value : 600 KUSDT
* Debt Value : 60 WEMIX
* Position Value : 90 WEMIX or 1,800 KUSDT
* Farming Position : \[45 WEMIX : 900 KUSDT]
* Short Position on 15 WEMIX
* Long Position on 900 KUSDT
#### 3) Position 1 + Position 2
* Position Value : 120 WEMIX or 2,400 KUSDT
* 15 WEMIX (Position 1, Long) + 15 WEMIX (Position 2, Short) = Neutral
* 100 KUSDT (Position 1, Short) + 900 KUSDT (Position 2, Long) = 800 KUSDT (Long)
As a result, Jennis is holding Long Position on 800 KUSDT. Although WEMX-KUSDT Pool is not a Stablecoin Pool, Jennis can Farm with much lower risks. Given that high APRs are usually accompanied by high price volatility and high risks, Farmers can expect high APRs with low risks by Hedging.
Taking a step further, Hedging can be formulated as below.
#### 1) Position 1
* Equity Value : $A worth of WEMIX
* Debt Value : $2A worth of KUSDT
* Position Value : $3A
* Farming Position : \[$1.5A worth of WEMIX : $1.5A worth of KUSDT]
* Long Position on $1.5A worth of WEMIX
* Short Position on $0.5A worth of KUSDT
#### 2) Position 2
* Equity Value : $B worth of KUSDT
* Debt Value : $2B worth of WEMIX
* Position Value : $3B
* Farming Position : \[$1.5B worth of WEMIX : $1.5B worth of KUSDT]
* Short Position on $0.5B worth of WEMIX
* Long Position on $1.5B worth of KUSDT
#### 3) Position 1 + Position 2
* Position Value : $3(A+B)
* $1.5A worth of WEMIX (Position 1, Long) + $0.5B worth of WEMIX (Position 2, Short)
* $0.5A worth of KUSDT (Position 1, Short) + $1.5B worth of KUSDT (Position 2, Long)
Should B = 3A, Jennis is holding a Neutral Position on WEMIX, thus Hedging his risks. It has to be noted that with price fluctuation, the Debt Ratio may also continuously change. It is advised that Jennis holds extra Tokens to add more collateral, should the Debt Ratio be at risk.
Strategy 4 emphasizes a method to maximize Leverage benefits while minimizing risks, by opening multiple Farming Positions. However, it is advised that Participants take a step-by-step approach to first understand KLEVA Protocol, before implementing Hedging; Starting as Lenders, then normal Leveraged Yield Farming, then Hedging.
---
# Agent Instructions: 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:
```
GET https://docs.kleva.io/legacy-en/investment-guide/strategy-4-farming-with-leverage-hedging.md?ask=
```
The question should be specific, self-contained, and written in natural language.
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.