Range Bounds

This page is a conceptual guide for choosing the lower (P_lower) and upper (P_upper) bounds of a concentrated liquidity position. It covers the mechanics and tradeoffs — not the technical trigger parameters. For triggerBufferPct mechanics, see Risk Parameters.

What Range Bounds Represent

In a Uniswap V3/V4 or PancakeSwap V3 concentrated liquidity position, P_lower and P_upper define the price interval within which your liquidity is active:

While the current price is between P_lower and P_upper, your liquidity earns trading fees proportional to your share of the active liquidity in that range.
When price moves outside [P_lower, P_upper], your position stops earning fees and your exposure becomes one-sided (full token0 exposure at the lower bound, full token1 exposure at the upper bound).

The Aegis hedging bots interact with these bounds:

Bastion opens shorts when price exits below P_lower or re-enters above P_upper.
Vanguard opens a long when price breaks above P_upper.
Orbit opens positions when price approaches either bound from inside, using interior triggers.

Fee-Capture vs. Narrow-Range Tradeoff

The primary tradeoff when choosing range width is between fee capture efficiency and out-of-range risk.

Tight range (narrow)

A tight range concentrates liquidity over a small price interval. While price remains in range, the fee APR per unit of liquidity is high because your capital represents a large share of the active liquidity in that narrow interval.

However:

Price exits the range more frequently.
Each out-of-range event stops fee accrual and creates one-sided token exposure (impermanent loss).
You may need to rebalance or reinvest more often.

Wide range (broad)

A wide range covers a larger price interval. The position stays in range longer through normal price fluctuations, reducing rebalancing frequency.

However:

Your capital is spread over a wider interval, so the fee APR per unit of liquidity is lower.
More capital is required to achieve the same notional liquidity depth as a tight range.

Numeric Examples

Example A: Tight range (±1% around current price)

Current ETH price: $2,500
P_lower = $2,475, P_upper = $2,525 (range width = $50, ±1%)

Very high fee capture rate while price stays in [$2,475, $2,525].
Price exits this range in most daily candles for a volatile asset like ETH.
Aegis hedging bots fire frequently; more futures margin is consumed.
Best suited for stable, low-volatility periods.

Example B: Moderate range (±5% around current price)

Current ETH price: $2,500
P_lower = $2,375, P_upper = $2,625 (range width = $250, ±5%)

Moderate fee capture rate; position stays in range through typical daily swings.
Aegis hedging bots fire less frequently; margin consumption is lower.
Reasonable balance between fee capture and rebalancing risk for moderately volatile markets.

Example C: Wide range (±10% around current price)

Current ETH price: $2,500
P_lower = $2,250, P_upper = $2,750 (range width = $500, ±10%)

Lower fee capture per unit liquidity; position rarely exits range.
Minimal rebalancing; Aegis bots fire only on significant price moves.
Suitable for volatile markets where you prioritize staying in range.

How Each Bot Interacts with Range Bounds

Bastion

Bastion opens hedges at the exterior of the range. A tighter range means Bastion’s triggers fire more often. A wider range gives the LP more room before protection kicks in.

See Bots — Bastion and Risk Parameters — Buffer semantics by bot.

Vanguard

Vanguard’s upper_long leg fires when price breaks above P_upper. A tighter range (lower P_upper) means Vanguard triggers on smaller upward moves. A wider range requires a larger breakout before Vanguard fires.

See Bots — Vanguard.

Orbit

Orbit’s triggers are proportional to the range width. With triggerBufferPct = 5%, a ±1% range produces very tight interior triggers (only $0.50 from each bound on a $50 range), while a ±10% range produces wider interior triggers ($25 from each bound on a $500 range).

See Bots — Orbit and Risk Parameters — Buffer semantics by bot.