When the trend indicator turns bearish, Futures Paycheck stops selling puts and buys a defensive position instead. This is the hedging bot, and it's on by default.

A put debit spread on /ES — buying a 30 delta put and selling a 20 delta put, both at 7 days to expiration.

The structure gains if the market continues falling, with the sold leg capping both the cost and the maximum gain. It's a defined-risk position: the most you can lose is what you paid for the spread.

These deltas and the 7-day expiry are fixed. Your entry delta and DTE settings apply only to bullish short puts.

As soon as the indicator enters the Bearish zone, then at most once every 7 days for as long as conditions stay bearish.

Unlike short-put entries, hedges aren't restricted to particular weekdays — the weekly spacing is the only limit.

The same number the bullish side places on one of its entry days. If your system enters 3 short puts per entry day, each weekly hedge buys 3 spreads.

It isn't sized from your existing short-put exposure or from a separate budget, and hedge entries aren't checked against remaining allocation the way short-put entries are.

Fixed at 200% take profit and 80% stop loss. Your configured take profit and stop loss apply to short puts, not to hedges.

The wide profit target reflects what a hedge is for — its value comes from occasionally paying off substantially during a decline, not from small consistent gains.

With the hedging bot disabled, the system simply does nothing during bearish conditions. It stops selling puts and waits for the trend to turn.

The trade-off is straightforward. Hedges cost money, and in a market that turns bearish briefly and recovers, they're a drag on returns. In a sustained decline, they're what limits the damage. On is the more defensive setting; off produces cleaner results in favourable conditions and less protection in bad ones.

The hedge is a separate position, not insurance attached to your short puts. It doesn't cap losses on them, and it isn't sized to offset them.

Your short puts are protected by your stop loss setting, not by the hedge. If you're relying on the hedging bot to limit downside on existing positions, that isn't what it does.

Hedges appear in your trade history as put debit spreads and in your execution history as bearish entries. If you see one, the indicator was in the Bearish zone at that time.