Trade Lifecycle

How your trades and positions are working

Stage	Details
Opening a trade	First, set up a position with a desired leveraged pair, and set slippage tolerance Collateral deposit is taken and converted to required FLP index token Pay Trading fee and Swap fee If user deposits collateral outside 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) 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 profit sharing session) Trading fee: 0.1% of position size for both opening and closing position Swap fee: Non-stables: 0 - 0.8% of trade size, depending on FLP capacity Stables: 0 - 0.06% of trade size
During a trade	Paying Borrowing Fee on an hourly basis Paid by both longs and shorts to fee pool, updated on an hourly basis The borrowing fee is a function of the utilisation of the asset. The higher the token utilisation, the higher the borrowing fee. Borrowing fee: (assets borrowed) / (total assets in pool) * 0.01% per hour (Optional) You are able to manage your position size and leverage level by: Depositing/Withdrawing collateral to/from existing position 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
Closing a trade	Closing your position at your desired price A user can choose what token to receive their profits / collateral in 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) Relevant fees are taken from collateral and sent to fee pool *Therefore, insufficient collateral may cause inability to repay fees, which could trigger liquidation! Paying Trading fee and Swap fee 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 Relevant fees are added to required collateral, deducted and transferred to fee pool Swap fee: Non-stables: 0 - 0.8% of trade size, depending on FLP capacity Stables: 0 - 0.06% of trade size Trading fee: 0.1% of position size for both opening and closing position
Liquidation	If the user's position falls below liquidation price or collateral left is insufficient to cover fees, the position will be liquidated and closed. Full Liquidation - there is no remaining user collateral original collateral < loss (original collateral - loss) < (borrow fee + margin fee) (original collateral - loss) < (borrow fee + margin fee + fixed liquidation fee) Partial liquidation - there is remaining user collateral (original collateral - loss) * 100 < position size *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