Margin Trading
KTX.Finance offers leveraged trading opportunities on major trading pairs, providing traders with the ability to trade assets such as BTC, ETH, BNB, and MNT with up to 100x leverage.
Before you open a position...
There are some parameters that you must be familiar with before opening a position, namely:
Collateral Management
The collateral management system on KTX.Finance is tied to the direction of the trader's positions.
For long trades, collateral is denominated in the respective trading pair's native currency. As an example, collateral for long ETH / USDT trades is denominated in ETH.
Users still enjoy the flexibility to open long trades even if they do not possess the specific assets in their wallet.
For example: A user only has USDT in his wallet and would like to long ETH. By using USDT as collateral, a swap router is employed to automatically convert the user's USDT holdings into the required asset (ETH, in this case) before initiating the trade.
Conversely, collateral for all short trades are denominated in stablecoins irrespective of trading pair. Collateral for short positions are all denominated in stablecoins and settled in USDT.
Leverage
Leverage is the use of borrowed capital to create larger positions in a certain trading pair. Traders trading with 10x leverage are able to open a position of $10,000 with only $1,000 in collateral.
Leverage is enabled by lending out assets in the KLP pool. Hence, traders have to pay a Borrowing Fee when conducting margin trades.
The maximum leverage allowed on KTX.Finance is 100x.
PositionLeverage = PositionSize / PositionCollateral
The position collateral will be affected by both asset price movements and borrowing fees. In the event of adverse price movements, the traders leverage on the position will increase beyond the initially used leverage.
This could potentially result in a liquidation.
Trading Pairs
Trading pairs on KTX.Finance varies depending on the network on which the protocol is active.
For example, on the Mantle network, the KLP pool comprises 50% USDT and 50% BTC/ETH/MNT. Conversely, on BNB Chain, the KLP allocation is 50% USDT and 50% BTC/ETH/BNB.
Consequently, the trading pairs supported on both networks are different.
The available trading pairs are shown on the trade page of every network.
Trading Direction & Settlement
Traders can open trades in two directions on KTX.Finance.
Long Trades that speculate on asset prices increasing through your trading time frame.
Short Trades that speculate on asset prices decreasing through your trading time frame.
Long Trades: On KTX.Finance, long trades, such as long BTC positions, are physically settled. This means that the settlement occurs in the respective asset, for example, BTC.
Short Trades: In contrast, short trades on KTX.Finance are cash settled. This implies that the settlement for short positions is in USDT.
Types of Orders
On the trade page, users can choose to execute 2 different kinds of orders on KTX.Finance with each fulfilling different functions.
Market Orders
A market order is an order to long or short an asset at the market's current best available price.
Limit Orders
A limit order on KTX.Finance is an order to long or short an asset at a pre-determined price.
However, it's important to note that the execution of limit orders is not guaranteed, and several conditions may prevent their execution.
The mark price, derived from an aggregate of exchange prices, did not reach the specified price set in the limit order.
Even if the mark price is reached, there may not be sufficient liquidity in the market to execute the order at the desired price
Executing the order would result in a position that exceeds the current maximum leverage allowed by the platform.
Complex Orders
Complex orders allow users to open a position and set take profits / stop losses (limit orders) in one click. This can be toggled by selecting / keying in your desired exit parameters on the trade page.
Note that Complex Orders are not available on BNB Chain.
Open Interest Limitations
Open interest is the total size of outstanding perpetual positions for an asset that have not been settled i.e. the total size of open trades.
Current open interest and open interest limits can be observed here
Given the settlement mechanism of the KLP pool, traders are free of counterparty risk (i.e. all trades are 100% covered and traders will always be paid out in the event of a windfall).
However, the maximum OI is limited by the protocol's total value locked.
Long OI is limited by the amount of assets staked within the KLP pool.
Short OI is limited by the amount of stablecoins staked within the KLP pool.
Liquidations
A liquidation process is triggered if the asset prices move adversely against the user. In this process, the liquidation contract will automatically close (liquidate) the user's position to prevent further losses.
Users pay a Liquidation Feewhen a liquidation is triggered.
A liquidation is triggered when:
PositionCollateral / PositionSize < 0.0067 OR 0.67%
PositionLeverage > 150x
PositionLeverage = PositionSize / PositionCollateral
PositionCollateral = Collateral - Losses - Borrowing Fee - Closing Position Fee
PositionSize = PositionCollateral * PositionLeverage
Liquidation Prices are calculated as such:
Longs: Liquidation Price = AvgPrice / ( 1 - 0.0067 + 1/RemainingLeverage)
Shorts: Liquidation Price = AvgPrice / ( 1 + 0.0067 - 1/RemainingLeverage)
RemainingCollateral = Collateral - Borrowing Fee - ClosingPositionFee
1/RemainingLeverage = RemainingCollateral/PositionSize
The diagrams below illustrate the detailed liquidation logic and the calculation of the liquidation price.
Borrowing fees will cause liquidation prices to change over time. Hence, it is important to monitor your liquidation price.
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