In margin trading, a position is your net balance of an asset in your Margin Wallet: what you hold minus what you owe.
- If you hold more than you owe, the position is long.
- If you owe more than you hold, the position is short.
You have one net position per asset. You cannot be long and short the same asset at the same time. If you hold 0.05 Bitcoin (BTC) and owe 0.02, your position is 0.03 BTC long. If you held 0.01 and owed 0.03, it would be 0.02 BTC short.
Long position
You open a long position when you borrow funds to buy more of an asset than your balance allows. You profit if the price goes up.
Example: you hold 1,000 Tether (USDT) and buy 3,000 USDT of Bitcoin. Bitso lends you the missing 2,000 USDT. You now hold Bitcoin and owe 2,000 USDT plus interest. If Bitcoin rises, you can sell it, repay the loan, and keep the difference.
Short position
You open a short position when you sell an asset you do not hold. Bitso lends you the asset so you can sell it. You profit if the price goes down.
Example: you hold 1,000 USDT and no Bitcoin. You sell 0.01 BTC, which Bitso lends you. You now hold extra USDT and owe 0.01 BTC plus interest. If Bitcoin drops, you can buy it back cheaper, repay the loan, and keep the difference.
How to open a position
There is no separate borrowing step:
- Transfer funds into your Margin Wallet. They are your collateral.
- Place a buy order to go long, or a sell order to go short, above your available balance.
- When the order fills, Bitso borrows the missing amount.
How big your position can be
The cap is your Trading Power, shown on every margin order ticket. Bitso does not use a leverage slider. Trading Power tells you the largest order you can place right now, given your investor profile, the collateral in your Margin Wallet, and the positions you already have open. Opening a position consumes Trading Power, and closing one frees it up.
Your order also has to keep your account within safe risk limits. Orders that would put your account at immediate risk if they filled are rejected when you place them.
Didn't work? Here's what to do
If your order was rejected, the two most common reasons are a size above your Trading Power and an order that would leave your account at immediate risk once filled. In both cases: reduce the order size, transfer more collateral into your Margin Wallet, or repay part of your debt before trying again.
Keep in mind
- Borrowed funds accrue interest every hour, for as long as the position stays open.
- Long and short positions both affect your Margin Level. If it reaches 1.10×, your positions can be closed automatically.
- Assets you transfer into your Margin Wallet also show up as long positions, even with no borrowing. Those do not accrue interest.