> ## 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.

# Trading Mechanics

> Understand margin requirements, leverage options, fees, and how longs and shorts work.

## Margin and Leverage

<CardGroup cols={3}>
  <Card title="Minimum Margin" icon="coins">
    **\$10 USDC**
  </Card>

  <Card title="Maximum Leverage" icon="arrow-up-right-dots">
    **Up to 10x** (varies by market)
  </Card>

  <Card title="Position Size" icon="calculator">
    **Margin × Leverage**
  </Card>
</CardGroup>

Higher leverage means higher potential returns, but also faster liquidation if the market moves against you.

| Leverage | \$1,000 Margin    | Approx. Move to Liquidation |
| :------- | :---------------- | :-------------------------- |
| 2x       | \$2,000 position  | \~27% adverse move          |
| 5x       | \$5,000 position  | \~11% adverse move          |
| 10x      | \$10,000 position | \~5.5% adverse move         |

<Warning>
  At 10x leverage, even small market movements can trigger liquidation. Make sure you understand the risks before using high leverage.
</Warning>

## Fees

| Fee                   | Rate | Applied to      | When                    |
| :-------------------- | :--- | :-------------- | :---------------------- |
| Market order open fee | 0.5% | Margin          | On position open        |
| Limit order open fee  | 1.5% | Margin          | On limit order creation |
| Performance fee       | 10%  | Trader's profit | On winning settlement   |

### Market Order Open Fee

**0.5% of your margin**, charged when the position opens.

| Margin Amount | Fee  |
| :------------ | :--- |
| \$1,000       | \$5  |
| \$5,000       | \$25 |

### Limit Order Open Fee

**1.5% of your margin**, charged when the limit order is created.

| Margin Amount | Fee  |
| :------------ | :--- |
| \$1,000       | \$15 |
| \$5,000       | \$75 |

<Info>
  If a limit order is partially filled and then cancelled or expires, the fee on the unfilled portion is refunded proportionally. For example, if 60% of your order fills and the rest is cancelled, you get back 40% of the open fee.
</Info>

### Performance Fee

If you close in profit, **10% of your profit** goes to LPs. You keep 90%.

| Gross Profit | LP Share | Your Take |
| :----------- | :------- | :-------- |
| \$2,000      | \$200    | \$1,800   |
| \$500        | \$50     | \$450     |

<Info>
  No performance fee if you close at a loss. You only pay when you win.
</Info>

## Longs and Shorts

### Long (YES)

You profit when the probability goes **up**.

* Entry at 40%, exit at 50% = **profit**
* Entry at 40%, exit at 30% = **loss**

### Short (NO)

You profit when the probability goes **down**.

* Entry at 60%, exit at 50% = **profit**
* Entry at 60%, exit at 70% = **loss**

<Note>
  Both directions work the same way mechanically. You're always trading the market price you see.
</Note>