Spot, margin and leverage

Short guides to the terms you will see on Rooq. None of this is financial advice. Test tokens have no value. The risks page has the full list of what can go wrong.

Swapping

A swap trades one token for another against a private Rooq pool. The pool prices each trade from its reserves, so larger trades move the price more. Reserves are private, so the quote you see is a rounded estimate. You set a minimum. If the operator can't fill your swap at that minimum by your expiry, your tokens come back.

Check your understanding

After a spot buy, what do you hold?

Collateral and margin

Perps use your private balance as collateral. Margin you assign to a position is locked in that position alone. Only your free balance can be sent or unshielded, and the contracts enforce that.

Check your understanding

Can you unshield margin that backs an open position?

Leverage

Leverage is position size divided by margin. Each market has a maximum set at deployment. Higher leverage means less margin for the same size and a liquidation price closer to the current price.

Funding

Funding moves between the two sides of each position. When more traders are long than short, longs pay. When more are short, shorts pay. Funding never creates or destroys collateral. It only moves between the two sides.

Check your understanding

When most open positions are long, who pays funding?

Liquidation

If losses take a position's equity below its maintenance margin at a fresh oracle price, one of two risk workers can liquidate it, even while you are offline. The position closes at the oracle mark and a capped penalty is charged. The liquidation price on screen is an estimate. Funding, fees and price gaps can move it. If the oracle stops updating, new positions and liquidations wait for a fresh price.

Check your understanding

Is the displayed liquidation price guaranteed?

Testnet only. Test tokens have no value.