Opening a Position
Start by selecting the direction of the leverage position you would like to open: “Long” or “Short”.
Asset Price goes up
Asset Price goes down
Defining collateral amount and selecting the leverage level. Collateral is used to open a position at the selected leverage. These two levers will define your position size.
Collateral x Leverage Level = Position Size
Example: If you select 10x leverage level with $500 collateral, the position size you purchase will be $5,000 worth of selected asset.
When setting your collateral, you have the option of setting it as a percent of your total free collateral. This is a nice feature for those traders that like to risk a fixed percent of their account size on each trade as part of their risk management strategy. For example if you have $10,000 in free collateral and type in 2.00% then you will put up $200 on the trade as collateral.
Vela Exchange offers the following order types to open a new position:
- Market: Order will fill at the current mark price.
- Limit: Order will fill at selected limit price or better. For longs, if limit price is set above mark price, then the order is treated as a market order. For shorts, if the limit price is set below mark price then the order is treated as a market order.
- Stop Market: A market order will be activated when price reaches the stop price. Stop price must be placed above mark price for longs and below mark price for shorts. If not the order will be triggered as a market order.
- Stop Limit: A limit order will be activated when the price reaches the stop price. Stop price must be placed above mark price for longs and below mark price for shorts. If not the order will be triggered as a market order.
Mark Price: This will show the price of the asset at the current moment in time.
Liquidation Price: This will show the asset price at which your position will be liquidated. If the mark price of the asset goes beyond this point (lower in case of a Long position, higher in case of a Short position), it will automatically close the position and the majority of the collateral used for the position will be lost.
Setting a TP/SL at Position Creation: An option is provided during opening of a new position to enter a TP and/or SL that is automatically set to fully close 100% of the position at the given trigger price for each. It is possible to manually enter a percent amount for each which will auto populate the corresponding price level at which the TP/SL is triggered.
For example, assume in the graphic below you are LONG on $WETH via a Limit Order set a 1300.00. You can then set a SL at 2.00% (~1274.00) and a TP at 5.00% (~1365.00), resulting in a Risk to Reward on the trade of 2.5:1.
Each order type is allowed a slippage range that it can trigger within. This is defaulted to 0.25% but is also user configurable.
Longs: trigger price + slippage % Shorts: trigger price - slippage %
For example, assume you place a market order to long BTC at 20,000 with a slippage of 1%. In this case the order may trigger up to a max price of 20,200.
To protect users and the exchange from front-running, a timer function is started any time a new position is opened or size increases for an existing position.
The default timer is set to 2 minutes and prevents the closing of profitable positions until: 1. the expiration of the timer 2. the asset price has changed by at least +0.5% for Longs 3. the asset price has changed by at least -0.5% for Shorts.
Positions at a loss may be closed at any time.
Additionally, in the case of increasing the size of an existing position, there is a 5 sec timer delay that must pass before the order can be triggered.