# Opening Trades

## **User Flow**

* Traders have the option to select collateral, exposure, leverage, as well as stop losses and take profits. The protocol supports market, limit, and stop orders at open.
* Prices are called on-demand, either via Chainlink low-latency oracles or Ostium's custom oracle solution, depending on the asset. Chainlink Automations or Gelato Functions respectively monitor emitted price request events and trigger price retrieval when requests are initiated.
* At position open, a trader's collateral is deposited into Ostium's trading contract, which stores the collateral of outstanding open trades until further action is taken (liquidation, closure).

## Trade Settings

* **Side:** traders first select the side of their trade – long or short.
* **Order Type:** the protocol supports three open order types at genesis – market, limit, and stop orders. Traders set limit and stop prices for the latter two trade types. Cancelling a limit or stop order incurs a <mark style="background-color:yellow;">0.10 USDC</mark> fee, deducted from your collateral.
* **Collateral:** the USDC locked to back a position.
* **Leverage:** traders can select between 1x-200x leverage, depending on the asset. More volatile or lower liquidity assets (e.g., Copper) have lower leverage limits than less volatile and/or highly liquid assets (e.g. GBP/USD).
* **Position Size:** traders can also determine total exposure by first adjusting position size, denominated in the notional asset, and inferring desired leverage or collateral amount.
* **Take Profit & Stop Loss:** traders can optionally set and/or adjust TP and SL orders at open. TP orders at 10x (900%) profit are automatically set to reduce tail event risk for LPs. (*Please note: maximum and mandatory TPs of 10x is enforced; over time the protocol may increase this threshold or eliminate it entirely should risk management analysis determine this protection no longer be necessary).*

## **Protoco**l Opening Fee

When opening a position on Ostium, a one-time **opening fee** is charged. This fee reflects the cost of initiating a trade. **No fees are applied when closing a position**, allowing traders to exit positions without additional cost. For example, a 4bps open fee is equivalent to 2 bps open and 2 bps close on other exchanges (which all charge at both open and close).

These fees remain **constant** regardless of open interest imbalances or the leverage used. This ensures a simple and predictable fee structure for trading traditional assets on Ostium.

## Open Price & Price Impact

Ostium executes trades using either the underlying market’s **bid/ask prices** or, for select pairs, **Dynamic Spreads**, depending on the asset’s liquidity profile.

* **Bid/Ask Execution:** Ostium relies on live market quotes for execution—**long positions open at the ask and close at the bid**, while **short positions open at the bid and close at the ask**. This method reflects true market behavior, ensuring executions align with real-time liquidity and trading depth for consistent, transparent pricing.
* **Dynamic Spreads:** For certain pairs, execution occurs at the **Price-After-Impact**—a dynamic mechanism that applies **0% spread** when short-term net volume remains below a configured threshold, and adds a **spread plus a dynamic impact component** once that threshold is exceeded. This allows zero-spread trading under balanced conditions while assigning costs only when order flow becomes one-sided. Learn more about [Dynamic Spreads](https://ostium-labs.gitbook.io/ostium-docs/dynamic-spreads).

For details on how each **order type** interacts with these pricing models, see the [Order Types](https://ostium-labs.gitbook.io/ostium-docs/ostium-trading-engine/order-types) page.