Go long when you expect the price to rise, or short when you expect it to fall. Choose your margin and leverage, and add a take-profit or stop-loss if you want one. Mog fixes the position’s liquidation price when it fills.
Margin and leverage
Section titled “Margin and leverage”Margin, also called collateral, is the money you commit to the trade. Leverage turns that margin into a larger position: position size = margin × leverage. Each market sets its leverage range within 1×–1,000×. The ticket uses that market’s current leverage range. After you add margin, effective leverage is position size divided by active margin. It cannot fall below the bottom of the market’s leverage range. Adding margin does not increase position size.
Higher leverage makes a given price move worth more relative to your margin. It also brings liquidation closer. Your position size is also called its notional.
Open-interest rules
Section titled “Open-interest rules”Each market has three open-interest settings: a pace, a side cap and a fade time. Together they limit how fast the gap between longs and shorts can grow and how large one side can get. They do not limit a balanced book: it can grow as large as traders make it. Every fill adds its position size to its side. A close removes the size it closes. Adding margin does not change position size, so it does not use room.
- Pace: after your fill, your side may lead the other side by at most its aged lead plus the pace. An order that leaves your side at or below the other side always fits.
- Side cap: after your fill, your side may hold at most the side cap.
A new position ages over the fade time, 30 minutes at launch. After one fade time it counts toward the aged lead at about 63% of its size, and after three at about 95%. Your side’s aged lead is how far its aged positions lead the other side’s aged positions. A lead that has held for a while therefore makes room to grow further, and a position opened a moment ago makes almost none. A close leaves both counts at once.
These are the only size limits: one order may use all the room they leave. The limits count notional, so they scale with leverage. At the same margin, a 100× position uses a tenth of the room of a 1,000× position. The app shows the room left on each side. Lower the size or the leverage to fit, or wait a few minutes.
An order the limits cannot take is refused when you submit it, before the open fee is charged. Room can still run out before your order fills. Then the order is voided, and its collateral and open fee return.
Governance sets each market’s pace, side cap, drift dial and volatility dial, and one fade time for every market. It can change them without the 24-hour delay, but only while the market is at rest: every published price update for the market processed. In practice that takes seconds. A lower limit does not close open positions.
The crowded side
Section titled “The crowded side”The side that leads is crowded. Its crowding is its smoothed lead as a share of the side cap, from 0 to 100%. While a side is crowded, its profits pay two charges, and the other side pays neither:
- Drift charge: the crowded side keeps 1 − drift dial × crowding of each move in its favor. At a drift dial of 1, a side 20% crowded keeps 80% of each move, and a side whose lead reaches the side cap earns nothing more.
- Volatility charge: each price update also takes volatility dial × crowding × move² ÷ price off the crowded side’s gain. Bigger swings take more, and a quiet market takes almost nothing.
Losses pay neither charge. Nothing is ever taken from your margin, so holding a position through time never liquidates it.
Each side has a gain index that moves with the price by the share it keeps, less its volatility charge. Your profit is the price gain, but never more than your side’s index gain since your fill. A move that reverses leaves the drift part where it started, and the volatility charge only lowers the index, so a price swing alone never pays a profit and a close at your entry price costs nothing. Crowding reads a smoothed book: new positions count in over the fade time and closed ones fade out over half of it, so one order does not swing it.
The charges are not fixed at fill. They apply to every open position on the crowded side, at each price update, and only to the move in that update. Profit already in the index stays. A take-profit is still a price level: the position closes when the price reaches it and pays on the gain left after both charges, as any close does.
Each market’s drift dial runs from 0 to 1 and its volatility dial from 0 to 100, both 1 at listing. The pace limits only how fast a side can lead; it moves neither charge. The fade time, 30 minutes at launch, is the same for every market, and governance can change it without the 24-hour delay only while every market is at rest: every published price update on every market processed. In practice that takes seconds. A change of the side cap, either dial or the fade time reaches every open position from the next price update. The ticket shows a crowded side’s current drift charge, for example −5%.
Crowding also moves your MOG. A position on the light side earns up to twice the MOG, and a position on the crowded side less, from the average skew over its hold. See MOG funding.
Two price levels to follow
Section titled “Two price levels to follow”- Liquidation price: the price at which the position loses its active margin and closes.
- Take-profit and stop-loss: optional orders that close the whole position at market when the price reaches their level.
You can close earlier or add margin to move liquidation farther away.
From order to fill
Section titled “From order to fill”- SubmitCommit margin and pay the open fee.
- Price updateReceive a later oracle price.
- FillOpen your position.
The update must be posted after your order. Its price window must end more than two seconds after the on-chain time of the block that included your order; the two seconds allow for the chain clock running behind the oracle clock. The market can move between submission and fill. Your order size does not change the oracle price. Orders must meet market and position limits, including the open-interest rules; an order that fails those checks returns its collateral. Placing an order charges the open fee; it comes back unless the order fills.
Fill capacity can delay an eligible order until a later update. If an eligible update arrives beyond the oracle delivery staleness limit, the order is voided, and its collateral and open fee return.
The fee rate, the close-curve width and the liquidation buffer are fixed when the position fills.
Trigger orders
Section titled “Trigger orders”A trigger order becomes ready to fill when an eligible oracle update touches its level from either direction. It fills at the final price of the update that can admit it, which can differ from the trigger level. There is no limit on that difference. If fill capacity delays execution, the order stays armed and needs no second touch.
Cancelling an order
Section titled “Cancelling an order”Cancellation is a request, not an immediate refund. Updates are processed in order. An eligible update whose window closed no more than two seconds after your cancellation’s on-chain time can still assign the fill. For a trigger order, that assignment occurs when it arms.
If no fill has been assigned, the first update whose window closes more than two seconds after the cancellation’s on-chain time removes the order and returns its collateral and open fee.