The three-step flow
Step 1 — You deposit collateral
You transfer euros from your main Coinmerce account into a dedicated Margin Account. This collateral is the maximum you can lose on the position. It's set aside and isolated from the rest of your funds.
💡 You decide the size of your position by choosing how much collateral to deposit. Want a €500 short on ETH? Deposit €500 in collateral.
Step 2 — Coinmerce borrows and sells the asset
Behind the scenes, Coinmerce lends you the crypto asset you want to short and immediately sells it at the current market price. The euro proceeds are held alongside your collateral in your Margin Account.
You don't manage any of this manually — when you tap Decrease on a supported asset and confirm, the borrow-and-sell happens in a single step.
Step 3 — You close when ready
When you want to close the position, Coinmerce buys back the same amount of crypto at the current market price and returns it to the lending pool. Whatever's left in your Margin Account (collateral + sale proceeds − buyback cost − fees) is yours.
If the price dropped, you keep the difference as profit
If the price rose, the extra cost comes out of your collateral
Position isolation
Every position is fully isolated. This means:
Collateral committed to one position can't be touched by another
A bad trade on one asset can't wipe out a profitable trade on another
You can have multiple positions open simultaneously, each with its own risk profile
Key parameters at a glance
Parameter | Value |
Leverage | 1× (no amplification) |
Required collateral | 100% of position size |
Maximum position per asset | €10,000 |
Position structure | Fully isolated |
Maximum loss per position | Your collateral only |
Borrowing fee charged | Every 4 hours |
Why 1× leverage?
Most exchanges offer leveraged shorting (5×, 10×, even 100×), where a small price move can liquidate the entire position. Coinmerce's 1× model is deliberately different:
You never owe more than you put in
Liquidation only happens after a substantial adverse move
You have time to react rather than being wiped out in seconds
This makes Spot Margin suitable for thoughtful directional trades, not high-frequency speculation.
Tracking your position
Your Margin Account shows a live Estimated P&L that updates with the market price — your real-time profit or loss if you closed right now, after fees.
You'll also see your Position Risk Ratio — a critical number that indicates how close you are to liquidation. We cover that in detail in Liquidation and the Position Risk Ratio.
Worked example
You deposit €1,000 collateral to short ETH at €3,000:
Coinmerce lends you 0.333 ETH and sells it for €1,000
Your Margin Account now holds €2,000 (your €1,000 + the €1,000 from the sale)
You owe 0.333 ETH back to Coinmerce
Scenario A — ETH drops to €2,700 (–10%)
Buying back 0.333 ETH costs €900. Your Margin Account ends at €1,100. After fees, your profit is roughly €100 (10% return on collateral).
Scenario B — ETH rises to €3,300 (+10%)
Buying back 0.333 ETH costs €1,100. Your Margin Account ends at €900. After fees, your loss is roughly €100.
Scenario C — ETH rises sharply (large adverse move)
At very large adverse moves, the Position Risk Ratio drops below the critical threshold and the system automatically closes the position. The exact threshold is shown in your Margin Account interface — for a 1× short, this happens when the buyback cost approaches the value held in your Margin Account. See Liquidation and the Position Risk Ratio for the full picture.
What you can short
Spot Margin is available on a carefully selected range of crypto assets — typically the most liquid majors. The full list is shown in-app and on the public Fee Schedule, and may change based on market conditions.
Next steps
Understand the full fee structure before opening a position
Read about liquidation and the Position Risk Ratio — the most important risk concept
See getting started to unlock access