# 3. Bands & Trading

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

<figure><img src="/files/hc9KtevDy9cbCGQtBaRi" 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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