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How It Works

Protective Fee
Collateral insurance protects the system during volatile or illiquid market conditions. Conditional Return
  • Profitable positions: Full insurance amount returned
  • Loss positions: Partial or full deduction from insurance to cover losses
  • Liquidated positions: Insurance may be fully consumed
Most markets require zero collateral insurance due to optimized liquidity conditions.

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Calculation Factors

Market Assessment
Insurance amount determined by multiple risk factors:
  • Time Decay: Events closer to resolution carry higher risk
  • Market Spread: Current bid-ask spread indicating liquidity
  • Volatility: Price fluctuation levels and market stability
  • Leverage Ratio: Higher leverage increases insurance requirements

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Insurance Process

1

Order Confirmation

Required insurance amount displayed during order placement.
2

Insurance Lock

When required, insurance transfers from leverage balance and locks until position closes.
3

Position Trading

Trade normally while insurance provides background protection.
4

Settlement

Insurance returned (profitable trades) or applied to losses (unprofitable trades) upon closure.

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Settlement Outcomes

Profitable Closure
Full insurance amount returned to your leverage balance. Loss Mitigation
Insurance partially or fully applied to cover position losses, reducing your actual loss. Liquidation Protection
Insurance helps absorb liquidation costs and market impact.
Collateral insurance may be partially or fully consumed to cover losses on unprofitable positions or liquidations.

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Current Features

Automatic Assessment
System calculates optimal insurance based on real-time market conditions. Transparent Pricing
Exact insurance requirement shown before order confirmation. Loss Protection
Reduces effective losses when positions move against you.

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Future Enhancements

Dynamic Release
Coming Soon - Early unlock of insurance for profitable positions to improve capital efficiency. Flexible Management
Enhanced controls for insurance allocation and release conditions.