# Yield Trading Strategy As we are aware, the yield market constantly fluctuates, including both Fixed Yield and Leveraged Yield. Based on market conditions, you can opt to switch between PT and YT positions to maximize your APY earnings. ## Yield Trade in Practice For example, on 1st Jan, 2024, there's a pool on Nemo looks like this
Through observation and understanding of the market, Alice thinks that the average underlying APY in the following period will be 5.5%, which is higher than the current 5%. So she chooses to purchase 10,000 YT at a cost of $460. During these 120 days, with an average underlying APY of 5.1%, Alice received a total of $167.67 in yield. Alongside the value of all her YTs at $380, her total assets amounted to $547.67. The trading profit from the previous transaction was $546.67 - $460 = $86.67, yielding an APY of 57%!
Then, Alice sensed the onset of a bear market (typically characterized by a decline in APY). Anticipating that the underlying APY would drop below 5% in the upcoming period, she decided to sell all her YT and purchase PT to secure the current 5.26% yield. Therefore, she bought 569.3 PT sSUI with all her $547.67. Alice holds 569.3 PT for another 120 days, and then the market looks like this:
Sure enough, the underlying APY dropped to 4.5%. However, since all of Alice's assets were PT and the price of PT rose to $0.985, her total assets were $560.76. Therefore, the previous transaction brought her a profit of $13.09 up to now, and its APY was 7.27%! {% hint style="info" %} After these two trades, Alice made a total of $100.76 in 240 days. Converted to APY, it was 33.31%! {% endhint %} Alice was very satisfied, cleared all her positions, and waited for the next entry opportunity. ## Conclusion In summary, yield trading is a highly effective strategy for capturing additional profits regardless of whether the APY market is bullish or bearish. * **If you anticipate a decrease in APY, Buy PT / Sell YT = Short APY.** * **If you expect APY to rise, Sell PT / Buy YT = Long APY.** Lastly, always remember that every trade involves risks alongside opportunities. If you prefer lower risk, trading PT may be suitable for you. If you are a risk-taker, then trading YT might be more appealing. --- # 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.nemoprotocol.com/tutorial/yield-trading-strategy.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.