# Trade Lifecycle

<table><thead><tr><th width="181">Stage</th><th>Details</th></tr></thead><tbody><tr><td><strong>Opening a trade</strong></td><td><p><strong>First, set up a position with a desired leveraged pair, and set slippage tolerance</strong></p><ul><li>Deposit a min of $10.1  worth of collateral</li><li>Collateral deposit is taken and converted to required FLP index token</li></ul><p><strong>Pay Trading fee and Swap fee</strong></p><ul><li>If user deposits collateral <em>outside</em> what’s required (e.g. longing ETH with USDC as collateral), user pays a swap fee to swap their token to the required collateral (e.g. protocol automatically swap USDC to ETH to complete the open position process)</li><li>Relevant fees are added to required collateral, deducted and transferred to fee pool, ultimately goes to FLP/FUL stakers and protocol treasury (as shown in <a href="https://docs.fulcrom.finance/fulcrom-finance/about-fulcrom/revenue-share">profit sharing session</a>)</li><li>See "<a href="../../about-fulcrom/fees">Fees</a>" page for details</li></ul></td></tr><tr><td><strong>During a trade</strong></td><td><p><strong>Paying Borrowing Fee on an hourly basis</strong></p><ul><li>Paid by both longs and shorts to fee pool, updated on an hourly basis</li><li>The borrowing fee is a function of the utilisation of the asset. The higher the token utilisation, the higher the borrowing fee.</li><li><strong>Borrowing fee</strong>: <br>(assets borrowed) / (total assets in pool) * <strong>0.01%</strong> per hour</li></ul><p><strong>(Optional) You are able to manage your position size and leverage level by:</strong></p><ul><li>Depositing/Withdrawing collateral to/from existing position</li><li>Creating a new position under the same long/short strategy on top of current position for the same indexed token. The newly created position will merged with the existing one and form a combined position with updated position size and leverage level</li></ul><p></p></td></tr><tr><td><strong>Closing a trade</strong></td><td><p><strong>Closing your position at your desired price</strong></p><ul><li>A user can choose what token to receive their profits / collateral in</li><li>By default, a user receives profit in index token (if you long ETH, you get ETH) or stables (if you short / long other non index tokens)</li><li>Relevant fees are taken from collateral and sent to fee pool</li></ul><p><em><strong>*Therefore, insufficient collateral may cause inability to repay fees, which could trigger liquidation!</strong></em></p><p></p><p><strong>Paying Trading fee and Swap fee</strong></p><ul><li>If user deposits collateral outside what’s required (e.g. ETH long requires ETH collateral), user pays a swap fee to swap their token to the required collateral ETH</li><li>Relevant fees are added to required collateral, deducted and transferred to fee pool</li><li>See "<a href="../../about-fulcrom/fees">Fees</a>" page for details</li></ul></td></tr><tr><td><strong>Liquidation</strong></td><td><p><strong>If the user's position falls below liquidation price or collateral left is insufficient to cover fees, the position will be liquidated and closed.</strong></p><ol><li><strong>Full Liquidation - there is no remaining user collateral</strong></li></ol><ul><li>original collateral &#x3C; loss </li><li>(original collateral - loss) &#x3C; (borrow fee + margin fee) </li><li>(original collateral - loss) &#x3C; (borrow fee + margin fee + fixed liquidation fee) </li></ul><ol start="2"><li><strong>Partial liquidation - there is remaining user collateral</strong></li></ol><ul><li>(original collateral - loss) * 100 &#x3C; position size</li></ul><p><em><strong>*User’s collateral will be utilised to pay off losses to the FLP and taken as liquidation fees which will be transferred to liquidation vaults</strong></em></p></td></tr></tbody></table>