Ostium Documentation
  • ๐Ÿ‘‹Welcome to Ostium
  • Getting Started
    • ๐Ÿ‘๏ธOverview
    • ๐ŸŽฏIntroduction: Our Thesis
    • ๐Ÿ’พGlossary
  • Ostium Trading Engine
    • ๐Ÿ๏ธOverview
    • ๐Ÿ“–Opening Trades
    • ๐Ÿฅ…Holding Trades
      • Funding Rate
      • Rollover Fee
    • ๐Ÿ“˜Closing Trades
    • ๐Ÿ“นStep-By-Step Tutorial
      • Connecting to Ostium
      • Fund Wallet/Account
      • Opening a Trade
      • Editing a Trade
      • Closing a Trade
    • ๐Ÿ“Order Types
  • ๐Ÿ“ˆStocks: Day Trading
  • ๐Ÿ’ฒFee Breakdown
  • Shared Liquidity Layer
    • ๐ŸฆOverview
    • ๐Ÿ’ฆLiquidity Buffer
    • ๐Ÿ“ŠMarket Making Vault
      • Deposit
      • Withdraw
      • OLP token
    • โ‰๏ธRisks
  • Supporting Infrastructure
    • ๐Ÿ—๏ธOverview
    • ๐Ÿ”ฎPrice Oracle
    • ๐Ÿ’ปAutomations
    • ๐Ÿ’พAPI & SDK
  • Security
    • ๐Ÿ”Smart Contract Audits
    • ๐Ÿ’ฐEconomic Audit
  • LEGAL
    • Terms of Use
    • Disclaimer
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  • Dynamic User interactions
  • Monitoring of Trade State
  • Compounding Fees
  1. Ostium Trading Engine

Holding Trades

Traders can add collateral and update TP/SL while their trade is open. Compounding fees charged vary as a function of current asset volatility and Open Interest Imbalance.

PreviousOpening TradesNextFunding Rate

Last updated 15 days ago

Dynamic User interactions

Users can update certain aspects of their open trades:

  • Update Take Profit: Traders can update the value of or add a Take Profit order.

  • Update Stop Loss: Traders can update the value of or add a Stop Loss order.

  • Add Collateral: Traders can top up collateral on their position to reduce leverage and minimize liquidation risk.

  • Remove Collateral: Traders can withdraw collateral on their position; however, the liquidation risk increases. A 0.50 USDC fee is deducted from collateral when this action is performed.

In all cases, no additional fee is charged by the protocol because no price is requested.

Monitoring of Trade State

  • Ostium uses Gelato Functions to continuously track price changes and determine the need for automated order execution (liquidations, stop losses, take profit orders).

  • Trade state simulation runs frequenlty, radically minimizing the risk of would-be liquidations or other automated orders from being executed outside of an acceptable time frame or of bad debt accruing for the liquidity buffer.

Compounding Fees

Ostium applies compounding fees to open positions to reflect the evolving market dynamics and the cost of holding positions over time. These fees accrue continuously and are factored into the traderโ€™s unrealized PnL. There are two distinct types, depending on the asset class:

  • (Crypto Pairs): Applied to positions on cryptocurrency pairs, this fee captures the open interest (OI) imbalance between long and short positions โ€” similar to traditional perpetual exchanges. It serves to:

    • Incentivize traders to rebalance OI skew

    • Minimize delta exposure for the Liquidity Buffer

    • Create a zero-sum transfer between the "popular" and "unpopular" side of the market

  • (Non-Crypto Pairs): Applied to positions on non-crypto pairs such as forex, commodities, and indices, the rollover fee is determined by the assetโ€™s short-term volatility. Unlike funding rates, this fee is charged to both sides of the market and is not zero-sum.

Both fees are synthetically applied to the entire position size, compounding per block, and are realized upon closing a position.

๐Ÿฅ…
Funding Fee
Rollover Fee