> For the complete documentation index, see [llms.txt](https://docs.temporal.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.temporal.exchange/3.-bands-and-trading.md).

# 3. Bands & Trading

**Traders can swap ‘bands’** *(bounded slices of a perp’s payoff)* **on Temporal**

<figure><img src="https://4006780634-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F1B8yoXvsAdZ27KuuGlqi%2Fuploads%2Fgit-blob-7e79ec664770dd1c7f0015a4ff161abda0eea870%2FTemporal%20Bands%20%26%20Trading.png?alt=media" alt=""><figcaption></figcaption></figure>

Bands are equivalent to American style perpetual options *(when no outer bound specified)* / their vertical spreads *(when outer bound specified)*.

All sold bands are fully backed by the trader’s perp notional.

Traders swap one band for another of equal value at the time of trade. All trades are premium-neutral.

Positions can be opened through the following swap structures:

* Option ↔ Opposite-direction option
* Option ↔ Opposite-direction vertical spread
* Vertical spread ↔ Opposite-direction vertical spread

Positions are closed by simultaneously buying back the residual (out-of-money) portion of a sold option or vertical spread and selling the residual (out-of-money) portion of a bought option or vertical spread.

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