Frequently Asked Questions: Spot Margin

Quick answers to the most common questions about short selling on Coinmerce.
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Why isn't Spot Margin available by default? Short selling carries different risks from buying crypto. The knowledge test ensures you understand those risks before exposing your funds to them.
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What if I fail the knowledge test? You can retake it. There's no penalty. Use the time between attempts to re-read the help articles.
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Is Spot Margin available in my country? Availability depends on your jurisdiction and account level. Check the supported regions list, or contact support if you're unsure.
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Which assets can I open a short position on? A carefully curated list of liquid crypto assets. The current list is shown in-app on the Spot Margin platform and on our public Fee Schedule. It can change based on market conditions.
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Is there a limit on position size? Yes — your maximum position size equals the collateral you deposit (because of the 1× structure). The maximum collateral per asset is €10,000, so you can short up to €10,000 per asset.
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Can I open multiple positions on the same asset? The €10,000 cap is per asset, not per position. Whether the interface allows you to stack multiple positions on a single asset is reflected in the in-app flow — but cumulative exposure is what counts toward the cap.
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Can I have positions on multiple assets at the same time? Yes. Each position is fully isolated, with its own collateral, P&L, and Risk Ratio.
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What are the borrowing fees? The rate varies by asset and current market conditions. The live rate is shown on the trade confirmation screen and on the public Fee Schedule.
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When is the borrowing fee charged? Every 4 hours, for as long as your position is open. The accumulated fee is deducted from your collateral when you close (or are liquidated).
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Do I pay a fee to open a position? No exchange fee on opening. You pay the standard exchange fee when you close voluntarily, or a liquidation fee if your position is force-closed.
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Can borrowing rates change while my position is open? Yes. Borrowing rates respond to market conditions and can move while you hold a position. The rate at the time of charge is what applies to that 4-hour window.
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How do I know my profit or loss? Your Margin Account shows a live Estimated P&L based on the current market price, after fees. This is what you'd walk away with if you closed right now.
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Can I add collateral to an open position? If supported, you'll see an option to add collateral on your open position in the Margin Account. Adding collateral lowers your Risk Ratio and reduces liquidation risk — useful if a position is going against you but your thesis hasn't changed.
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Can I withdraw collateral from a winning position? Withdrawing collateral, where supported, increases your Risk Ratio. Be cautious: it leaves less buffer against adverse moves.
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Can I partially close a position? The standard flow closes the entire position at once. Check the in-app options for partial closing if and when supported.
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What happens if I forget about an open position? Borrowing fees continue to accrue every 4 hours regardless. If the price moves against you enough to breach the liquidation threshold, the position closes automatically. Open positions are your responsibility.
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What exactly is liquidation? Automatic closure of your position by Coinmerce when your Position Risk Ratio drops below a critical threshold. It's how we ensure the borrowed crypto can always be returned.
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How do I know if I'm at risk of liquidation? Your Margin Account shows a live Risk Ratio. Coinmerce also attempts to send a push notification when risk turns high — but don't rely on it. Markets can move faster than notifications.
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Can I lose more than my collateral? No. The 1× isolated structure caps your loss at the collateral you deposited. You can never owe Coinmerce money on a Spot Margin position.
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What's the liquidation fee? A fixed percentage of the position size, applied when liquidation triggers. It's higher than the voluntary close fee. The exact rate is shown on the trade confirmation screen.
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If I'm liquidated, do I get anything back? Whatever remains in the Margin Account after the buyback and liquidation fee is returned to your main account. In severe gap moves, this can be zero.
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How is this different from futures or perpetual contracts? Futures/perps typically use leverage (often 5×–100×), have funding rates with more complex structures, and can liquidate in seconds. Coinmerce Spot Margin is always 1×, fully collateralised, and isolated — slower-moving and lower-stakes by design.
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How is this different from an inverse ETF? Inverse ETFs and similar products track an index synthetically and have their own management fees and tracking errors. Coinmerce Spot Margin is a direct short on the spot price of the asset itself.
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Could I just hedge by selling crypto I already own instead? Yes — and for many users that's the simpler option. Spot Margin is most useful when you don't already hold the asset but want exposure to a price drop, or when you want to keep your existing holdings for tax or strategic reasons.
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How is Spot Margin taxed? Tax treatment depends on your country of residence and personal situation. Coinmerce provides transaction history that you (or your accountant) can use for reporting. We can't give tax advice — please consult a qualified tax professional.
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Are borrowing fees tax-deductible? This depends on your jurisdiction. Again, a tax professional is the right resource.
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What if the asset I'm shorting gets delisted from Spot Margin? If an asset is removed, Coinmerce will notify affected users and provide a window to close positions. Unclosed positions may be force-closed at the listed cutoff time.
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What if Coinmerce pauses Spot Margin entirely? Existing positions remain manageable (you can close them) but no new positions can be opened during a pause. Pauses are typically temporary and tied to market conditions.
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What happens during exchange downtime? If trading is paused on the underlying market, position close and liquidation may also be paused. This is rare but possible during extreme volatility events.
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What if my collateral becomes insufficient mid-trade due to a fast move? The system is designed to liquidate before this happens — but in extreme gap moves (e.g., a flash crash in reverse), residual loss is absorbed by Coinmerce, never by you beyond your collateral.
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If your question isn't answered here or in the other Spot Margin articles, contact support. Include your account email and a description of the position or scenario you're asking about — we can help much faster with that context.