Trading

Every position has a Long and a Short, and buying either is a bet on which way a name's share of the board moves. This page covers how trades move prices on a board where share is conserved, the AMM that is the counterparty to every trade and quotes both sides at all times, how profit and loss land in your balance, the fee, and the absence of funding rates and liquidations.

Long and Short

Every position has two tokens: Long and Short.

The Long price is the position's share of the board. A position holding 18% of the board has a Long price of 18.0¢. If its share rises to 25%, the Long price rises to 25.0¢.

The Short price is the complement. Long price and Short price always sum to $1.00. A Long price of $0.18 means a Short price of $0.82.

Buy Long and you profit when the name's share rises. Buy Short and you profit when it falls. See Tokens for how Long and Short tokens work.

How trades move prices

All prices on a board sum to $1.00. Buying a position increases demand for it, and demand raises its price. When one price rises, the others must fall to keep the total at $1.00. Selling works in reverse.

A zero-sum board

Share on the board is conserved: for one name to gain share, others have to lose it. Every trade lands on the whole board at once, so pushing one name up is the same act as cheapening every other. There is no tide that lifts every name together, and profit comes from catching a move before the rest of the board does.

The AMM

Every board is priced by a custom-built automated market maker, designed for markets where every position competes for a share of a fixed total, and it is the counterparty to every trade. You trade directly against it at any time: no order book, no waiting for a match, no outside liquidity providers. It quotes a buy and a sell price for every position at all times, so a board is never closed and never illiquid, and prices only move when people trade.

Builders can read the design in Under the hood.

Winning and losing

You buy a position with the dollars in your balance, and selling it returns dollars to your balance. The difference is your profit or loss: buy a Long at 18.0¢, sell it at 25.0¢, and you make 7.0¢ per token. The fee is built into the price you trade at, so there is nothing separate to subtract. Deposit & Withdrawal covers how dollars move in and out.

The fee

Every trade carries a fee, sized to the variance of the position's price, so it is cheapest out at the extremes of the board and highest in the middle, and closing a position costs the same as opening it did at the same price. See Fees & revenue for the model and where the fee goes.

No liquidations or funding rate

A position on PopularityX works like a prediction market position. There is no funding rate charged for holding it and no liquidation risk. Your maximum loss is the price you paid for the position, and it stays open for as long as you choose to hold it.

Closing a position

Sell Long or Short tokens back to the AMM at any time. It quotes a price for every position continuously, so there is always a price to enter or exit. A sale is paid from the market's pooled cash, the same pool every buy pays into, so the pool grows as money flows in. There is no expiry and no settlement date.

What holding earns: $POPX.