How is liquidation price determined?

A position will enter liquidation when the total allocated margin for the position, along with its unrealized profit and loss (PnL), falls below the required maintenance margin.

Learn more about liquidation engine in the technical docs here.

Why does the unrealized profit and loss (PnL) differ from the actual PnL?

The unrealized PnL is calculated based on the current mark price, which can vary from the actual realized PnL after closing the position. The difference between the two depends on the difference between the mark price and your average exit price.

When are profits realized? Can I see them immediately?

Profits are only realized when you close a position (reduce-order filled) or when the market for the open position expires.

Is futures trading conducted through automated market makers (AMMs) or liquidity providers (LPs), or is it limited to order books?

The primary mode of futures trading on Demex is conducted through an on-chain order book. Liquidity Providers (LPs) supply liquidity to perpetual pools that are AMMs which provide liquidity to the order book to facilitate trading. This method allows for traditional order-based trading dynamics where buy and sell orders are matched.

Users can also select the "lite" mode interface which simplifies the trading interface to resemble that of AMM Swaps, making it more accessible and intuitive for those familiar with AMM swap platforms. This allows Demex to cater to both traditional traders who prefer order books and those looking for the simplicity and familiarity of AMM-style trading.

How can I be notified of liquidation events?

You are responsible for monitoring your positions. However, community-developed monitoring tools and alerts will be available in the near future.

What happens if I don't close my positions before the contract expires?

Your position will be automatically closed and settled at the settlement price, at the time of expiry.

The settlement price is the Time Weight Average Price (TWAP) of the index price during the 30 minutes leading up to the contract's expiry.

Learn more here.

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