Margin Trading on Stellar
Testnet product
Margin trading currently runs on the Stellar testnet with test funds, isolated from mainnet lending. The mechanics documented here are live on-chain; parameters may still change before a mainnet release. A built-in paper-trading mode lets you practice with zero risk.Margin trading lets you open a leveraged long or short on XLM against USDT margin: the protocol lends you the difference between your margin and the position size, using the same lending pools documented elsewhere in these docs, with a dedicated risk engine on top.
Position sizing#
positionSize = margin × leverage (leverage: 2×–5×) borrowed = margin × (leverage − 1)
Nothing is ever paid into your wallet: the borrow and the swap happen inside the protocol, and the resulting position is held by the margin controller as collateral for the debt.
Opening and closing#
An open is a three-step on-chain sequence behind a single button: reserve the position, swap through the on-chain liquidity pool, activate. Closes run the sequence in reverse. The swap back happens on-chain too, so you never need the debt asset in your wallet to close. If a sequence is interrupted, the app offers resume or cancel; unfinished opens expire after 30 minutes and release their funds.
Liquidation math#
Margin positions use maintenance-margin logic (not the lending collateral factors): a position is liquidatable when its value, discounted by the 5% maintenance margin, no longer covers the debt.
liquidatable when: positionValue × (1 − 0.05) < debtValue Long: liqPrice = entry × (lev − 1) / (lev × 0.95) Short: liqPrice = entry × 0.95 × lev / (lev − 1)
Liquidation-price calculator
XLM/USDT at an illustrative $0.30 entry: see how leverage squeezes your room for error.
Position = margin × leverage; the protocol lends the rest ($200). Interest on that debt accrues while the position is open and is folded into your PnL.
Position size
$300
Borrowed
$200
Health factor at entry
1.43
must open ≥ 1.10
Liquidation price
$0.2105
Price move to liquidation
-29.8%
a fall this size liquidates
Maintenance margin
5%
+1% liquidation incentive
Estimate at entry, ignoring accrued interest and fees. The on-chain health factor decides, never the UI.
Protections & parameters#
| Parameter | Value | What it does |
|---|---|---|
| Minimum open health | 1.10 | Positions can't be opened already near liquidation |
| Maintenance margin | 5% | The buffer that defines the liquidation threshold |
| Liquidation incentive | 1% | Bonus paid to liquidators for closing unhealthy positions |
| Max slippage (oracle band) | 5% | Opens are rejected if the pool price strays >5% from the oracle price |
| Leverage | 2×–5× | Integer steps |
| Open/close fees | 0 (testnet) | Borrow interest still accrues and is folded into PnL |
The oracle band deserves emphasis: if the on-chain liquidity pool's price drifts more than 5% from the independent oracle price, opens are blocked entirely, and no slippage setting can override it. This protects you from opening into a manipulated or thin market, at the cost of occasionally having to wait out a drift.
Take-profit & stop-loss#
- Set independent TP and SL trigger prices on any open position, with live PnL preview.
- While the app is open, a client-side monitor watches the mark price and executes your triggers.
- An always-on server keeper can arm triggers that fire even with the app closed.
PnL is net of interest
The PnL you see already subtracts accrued borrow interest: the number on screen is what you'd actually realize on close, not a gross figure with costs hidden elsewhere.Read next#
Health factor & liquidation
The lending-side risk model, for contrast with maintenance margin.
Risks
Leverage amplifies every risk on this list.
Common questions
What leverage can I use?
Between 2x and 5x, in integer steps. Position size is your margin multiplied by the leverage, and the protocol borrows the difference.
How is the liquidation price calculated?
A position is liquidatable when its value discounted by the 5% maintenance margin no longer covers the debt. At entry that gives liqPrice = entry × (lev − 1) / (lev × 0.95) for a long, and entry × 0.95 × lev / (lev − 1) for a short. Accrued borrow interest shifts the real threshold over time, and the on-chain health figure is authoritative.
Why was my position blocked from opening?
Most often the oracle band: if the on-chain liquidity pool's price strays more than 5% from the independent oracle price, opens are refused and no slippage setting can override it. That protects you from opening into a thin or manipulated market.
Do take-profit and stop-loss orders work with the app closed?
An always-on server keeper can arm triggers that fire with the app closed. The client-side monitor only runs while the page is open.
Is margin trading live on mainnet?
Not yet. It runs on the Stellar testnet with test funds, isolated from mainnet lending, and a paper-trading mode lets you practise at zero risk.
Last reviewed on .