Margin Trading
1. Leverage
Traders can choose different leverage times when opening position, and the leverage range supports 1-5 times.
Formula: Leverage = (Loan + Principal) /Loan
2. Expected Price
The expected price is calculated based on the amount of funds to be traded and the real-time depth of pools underlying DEX.
3. Worst price
The worst price is calculated according to the expected price and slippage tolerance settings. When you buy, the worst price is expected to be higher, and when you sell, the worst price is expected to be lower. Take 0.5% slippage setting as an example, the worst price is calculated as follows.
Formula:
Worst Price for Long Position= Expected Price*1.005;
Worst price for Short Position= Expected Price*0.995
4. Liquidation price
Taking BNB/USDT as an example, liquidation will be triggered if:
1. Short: When BNB rises to a certain price higher than the opening price, the debt ratio reaches 90%, thereby triggering the position to be liquidated.
Formula: Liquidation Price = Position Value in USDT * 90% / Amount of BNB in debt
2. Long: When BNB drops to a certain price lower than the opening price, the debt ratio reaches 90% and liquidation is triggered.
Formula: Liquidation Price = Amount of USDT in debt / ( Position Value in BNB * 90%)
5. H2O Rewards APR
H2O reward is allocated based on the position value of the trader.
Formula: H2O Rewards APR = Value of H2O annual output in the pool * Position Propotion/ Position Value
6. Borrowing Interest
The annualized interest rate of borrowing funds from H2O Finance Bank when the trader opens a position with leverage is determined by the triple-slope interest rate model as detailed below.
Formula: Interest = m * utilization + b
7. Trading Feee Rate
Trading fee include DEX trading fee and H2O M fee. DEX trading fee rate is affected by the proportion of borrowing funds (that is, the transaction part) in the position value, and the H2O M fee is charged at a fixed rate of 0.1%.
Formula: DEX Trading Fee Rate = (Leverage Times -1)Leverage Times * 0.1%
8. Trading Fee
The amount of trading fee paid by the trader.
Formula: position value * trading fee rate.
9. Debt Interest
The interest rate is the cost of debt for the borrower, since lenders require compensation for the loss of use of the money during the loan period.
Formula: Debt Interest = Current Debt-Initial Debt
10. Profit and loss
The ratio of increase or decrease of equity value relative to the principal value (including the value of added collateral).
Formula: PNL = [Equity Value-(Principal+Added Collateral)]/ (Principal+Added Collateral)
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