> ## Documentation Index
> Fetch the complete documentation index at: https://docs.ultramarkets.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Time-Boxed Positions

> Why every position has a predetermined close date and how this enables safe leverage.

Every position on Ultramarkets has a predetermined close date. This isn't a limitation. It's the architectural choice that makes leveraged prediction markets possible.

## Why Positions Must Be Time-Boxed

Prediction markets are fundamentally different from perpetual assets like BTC or ETH. They have two properties that make open-ended leverage dangerous:

### Time Decay

As resolution approaches, liquidity often deteriorates and volatility increases. A position that's safe today might become unliquidatable tomorrow, not because the probability changed, but because time ran out.

### Binary Resolution

At the moment of resolution, prices snap to 0% or 100%. There's no gradual price movement to liquidate against. This is **gap risk**.

```mermaid theme={null}
flowchart LR
    A[Market Listed] --> B[Trading Window]
    B --> C[Close Date]
    C -.-> D[Resolution]
```

| Phase              | What Happens                                       | Your Exposure |
| :----------------- | :------------------------------------------------- | :------------ |
| **Trading Window** | Open, close, and manage positions freely           | ✓ Active      |
| **Close Date**     | All positions auto-close at market price           | ✓ Exiting     |
| **Resolution**     | Event outcome determined, prices gap to 0% or 100% | ✗ None        |

<Note>
  Time-boxing solves both problems. By closing all positions before resolution, we exit while markets are still liquid and prices are still continuous.
</Note>

## How Close Dates Are Set

Each market's close date is set when we list it, based on the event's characteristics:

| Event Type        | Typical Close Window                    | Example                                    |
| :---------------- | :-------------------------------------- | :----------------------------------------- |
| **FOMC meetings** | Hours before announcement               | Close at 12 PM ET, decision at 2 PM ET     |
| **Elections**     | Days before results certified           | Close election night, before counting ends |
| **Sports**        | At event start                          | Close at kickoff                           |
| **Earnings**      | Before market close on announcement day | Close at 3 PM ET for after-hours release   |

<Info>
  The close date is always visible before you open a position. It cannot change after listing.
</Info>

## What Happens at Close

When a market reaches its close date:

<Steps>
  <Step title="Positions Closed">
    All open positions in that market are closed at current market price
  </Step>

  <Step title="P&L Settled">
    Profits and losses are calculated and settled
  </Step>

  <Step title="Capital Returned">
    Borrowed capital returns to the vault
  </Step>

  <Step title="Funds Distributed">
    Remaining funds return to trader accounts
  </Step>
</Steps>

<Note>
  This happens automatically. You don't need to take any action. If you want to exit earlier, you can close manually at any time.
</Note>

## The Tradeoff

Time-boxing means you can't hold a position through resolution. You're trading probability movements, not betting on outcomes.

<Card title="The Mental Shift" icon="lightbulb">
  For some traders, this is a limitation. For the system as a whole, it's what makes leverage safe.
</Card>