Opening a Trade

Opening a position on Merkle Trade gives you the ability to gain leveraged exposure to the price of an asset without having to acquire the underlying asset.

You can either open a 'Buy' (aka Long) or 'Sell' (aka Short) position, where a buy position yields profit if the asset price increases and incurs a loss if the price decreases. On the other hand, a sell position yields profit when the asset price drops.

Market/Limit Order

Merkle Trade offers two types of orders:

  • Market Order: Order in which you immediately enter a position at the current market price.

  • Limit Order: Order to enter a position when the price moves to a desired price or better than the specified price. Note that there is still a possibility the order will not be executed if the price moves quickly. You can cancel a limit order in the Order tab if it hasn't been executed after some time.

Collateral & Leverage

  • Collateral (#1) is the amount of funds you use to open a trading position.

  • Leverage (#2) determines the multiplier for the exposure to the underlying asset. With leverage, you can open a larger position with a smaller amount of initial capital. This means that any profits or losses on the position are magnified by the leverage used.

  • Position Size (#3) refers to the extent of a position's exposure, which is determined by multiplying collateral by leverage.

  • Position details (#4) specifies the entry price (if it's market order) and the liquidation price

Take Profit / Stop Loss

Take Profit and Stop Loss are features that allow you to set a target price for the automatic closure of your position.

  • Take Profit (TP) is a pre-determined price level at which you might intend to close your position to lock in profits. For risk management purposes, the maximum Take Profit is currently limited to 900%.

  • Stop Loss (SL) is a pre-determined price level at which you might intend to close the position to limit the losses in case the market moves against your position.

For forex & commodity pairs, Take Profit and Stop Loss may be executed at prices significantly different from the specified price, due to a price gap between the market's closing price and the next market's opening price.

Price Impact

Price impact is applied to the index price to balance the total open interests of long and short positions on the protocol. On the frontend, the "Mark price" reflects the execution price of the order, taking the price impact into account.

Please refer to Trading Fees for more details.

Public Beta Limits

Some limitations are set in place to ensure the security and reliability of the protocol for the duration of Early Access.

  • Maximum profit a trader can take in a single trade is capped at 900% (to be increased shortly)

  • The default TP setting for SELL positions with the leverage below 5x is 100%

  • The maximum collateral per position is 5,000 zUSDC.

  • There is a Maximum Open Interest per pair.

  • Minimum Open Position Size per pair is $300 for crypto, $600 for commodities, $1500 for forex.

  • Minimum Collateral Size is set to $2 zUSDC.

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