Leverage & Margin Trading

Leverage multiplies exposure through margin trading on the CLOB. You post collateral to control a position larger than your margin would normally allow.

​

How It Works

If price = $0.30: +$500 profit (500% ROE) If price ≈ $0.13: Liquidation triggered

​

Key Parameters

• Initial Margin (IM): 20% (required to open position)
• Maintenance Margin (MM): 10% (required to keep position open)
• Max Leverage: 10x

​

Position Sizing

$\text{Position Size} = \text{Margin} \times \text{Leverage}$ $\text{Shares} = \text{Position Size} / \text{Entry Price}$ Example: $$\$100 \ \text{margin} \times 5 = \$500 \ \text{position}$$ $$\$500 / \$0.15 = 3,333 \ \text{shares}$$

​

Liquidation Price

$$\frac{(\text{Entry Price} \times \text{Shares}) - \text{Margin}}{\text{Shares} \times (1 - MM)}$$ Example:

​

Partial Liquidation

Liquidation happens in stages: This prevents complete wipeout on brief volatility.

​

Profit & Loss

$$\text{PnL} = (\text{Exit Price} - \text{Entry Price}) \times \text{Shares}$$ Example: Leverage amplifies both gains and losses proportionally. Example: