Long / Short
Last updated
Last updated
In order to go long or short using squared assets it is possible to use the trading interface - here.
The trading interface wraps both the minting, burning and swapping of assets into single transactions. However, for advanced users wishing to perform unique strategies it is possible to perform actions individually, see advanced options.
Note: for users who are unable or do not wish to use the UI please see advanced options
Going long with a squared asset involves simply buying the asset, e.g. sqOSMO, at the current market price which giving you exposure to the squared asset. Thus once you have bough a squared asset you can eventually realise your PnL by closing the position and selling the asset.
Note: it is not possible to be liquidated with a long position!
In order to go long first navigate to the main page and select the tab Long and then Open on the position selector. Entering an amount of base you wish to sell in order to purchase squared asset at the current market price.
Once happy with the amounts click Open Long and sign the transaction with your wallet of choice!
To close the open long position the squared asset must be again sold in its respective pool. This would realise any PnL.
Navigating to the Long tab select Close. Then as with opening a position enter the amount of squared asset, e.g. sqOSMO, you wish to sell and clicking the Close Short button.
Opening a short position is somewhat different to opening a long position as it requires user's to create a vault that holds:
Base Asset Collateral
Amount of Power Debt
When you create a short position the contract first mints the amount of squared asset token according to your desired exposure and then sells that token in the relevant pool in order to realise the exposure.
To do so in the interface first navigate to the Short tab and then enter the amount of collateral you wish to place. Then move the slider to your desired level of collateralisation (note that having less than 150% can lead to liquidation!).
Once you are happy with your collateralisation click the Open Short button and sign your transaction.
You will be given a vault containing all the relevant information shown below:
Closing a short position can be performed in two ways:
Partial Close
Full Close
For a partial close first navigate to the Short tab and click the Close button. Next enter the amount of squared asset you wish to burn and then the collateralisation level you want to keep. This will automatically calculate the amount of collateral you may withdraw to keep the position collateralised at the level desired.
Note: it may not be possible to withdraw collateral and burn square asset for a given collateral ratio.
Once you are satisfied with the ratio press the Close Short button and sign the transaction. In the case of a full close the entire vault collateral and debt will be removed.
