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Trade Future Yield
Use Yield Tokens to take a view on future yield.
Yield Tokens, or YTs, give you the future yield produced by an asset until a fixed expiry date.
Buy YT when you think the asset will earn more yield than the market currently expects. Your result depends on the yield received and the price you paid.
Why YT can feel leveraged
A YT usually costs much less than the value of the asset whose yield it represents. A small amount of capital can therefore create exposure to the yield of a larger notional amount.
This is yield exposure, not a loan. The leverage changes with the YT price, time remaining and expected yield.
Simple example
You pay 5 USDC for YT linked to 100 USDC of notional value.
- If the YT receives more than 5 USDC of yield before expiry, the position is profitable before fees.
- If it receives less, the position loses money.
- If it receives no yield, you can lose the full 5 USDC paid.
How to do it
Open Trade Yield in the Spectra app.
Choose an asset and check the expiry date.
Review the YT output, implied APY, fees, liquidity and minimum output.
Approve the asset, then confirm Buy YT.
Track the yield received and the time remaining.
Before you confirm
- YT loses time value as expiry approaches.
- High implied APY means the market already expects high future yield.
- A change in the underlying yield can quickly change the YT price.
- Low liquidity can make entering or leaving the position expensive.
- Your maximum loss is the amount paid for the YT, plus transaction costs.
YT is a speculative position. Do not treat the displayed leverage as fixed or guaranteed.