How Spot Margin works
Opening a Spot Margin position involves a few steps that all happen behind the scenes when you confirm the trade. Here's what's actually going on, and what you need to know to use it.
Opening a position
When you tap Decrease on a supported asset and enter the amount of collateral you want to commit:
Your euros are locked as collateral in a Margin Account.
Coinmerce lends you the crypto you're shorting.
The borrowed crypto is sold at the current market price.
The euro proceeds are held alongside your collateral in your Margin Account.
You don't do any of this manually. It all happens in one step.
Closing a position
When you close the position:
You buy back the same amount of crypto at the current market price.
The crypto is returned to Coinmerce to repay the loan.
Your collateral is unlocked, plus or minus the price difference and any fees.
If the price dropped, the leftover is your profit. If it rose, the extra cost comes out of your collateral.
A worked example
You deposit €100 collateral to short BTC at €100,000:
Coinmerce lends you 0.001 BTC and sells it for €100.
Your Margin Account now holds €200 total (€100 collateral + €100 from the sale).
You owe 0.001 BTC back to Coinmerce.
If BTC drops to €50,000: Buying back 0.001 BTC costs only €50. Your Margin Account ends at €150. After fees, you walk away with roughly €50 profit on your €100 collateral.
If BTC rises to €150,000: Buying back 0.001 BTC costs €150. Your Margin Account ends at €50. After fees, your loss is around €50.
Key rules to know
Isolated positions. Each position has its own collateral. A loss on one trade can't affect another position or your main account balance.
No modifications after opening. Once a position is open, you cannot add collateral, withdraw collateral, or change the position size. You can only close it in full.
1 position per asset. You can hold positions on multiple assets at the same time, but only one open position per asset.
Maximum loss is your collateral. You can never owe Coinmerce more than what you put in.
Tracking your position
In your Margin Account, you'll see:
Collateral: what you locked to open the position.
Position value: collateral plus or minus unrealised profit/loss.
Position Risk Indicator: Low / Medium / High, showing how close the position is to liquidation.
Borrowing fee accrued: the cost so far of keeping the position open.
You can close the position at any time from this screen.