3 posts tagged with "perps"

Every trading interface shows you a price. Almost none of them tells you what your order will actually pay.

The number on screen is the best price for the first unit. A market order of any real size does not trade at the best price; it trades at the best price, then the next one, then the next, until the size is filled. The cost of that walk is slippage, and the only honest way to quote it in advance is to do the walk before the order goes out.

Most order-handling code is written as if there are two outcomes: the order worked, or it didn't.

There is a third, it is more common than people expect, and it is the one that actually costs money. You send an order. The connection stalls, or the venue returns a shape you don't recognise, or a gateway hands back a 502. You now do not know whether you have a position.

Most explanations of leverage stop at the point where you open one position. The interesting behaviour starts at the second one.

If you are long one market and short another and the first goes badly, what happens to the second? The answer depends entirely on whether your positions share collateral — and on a unified margin account, they do. That is the whole design, and it is rarely spelled out before you use it.