> For the complete documentation index, see [llms.txt](https://limitless.gitbook.io/limitless/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://limitless.gitbook.io/limitless/intro/example-trade.md). # Example Trade ## Liquidation-Free 100x long ETH-USDC You have 100 USD as margin and want to open a 100x leverage long ETH position in Limitless. From the Limitless ETH-USDC pool, you borrow 9900 USD and open a 5 ETH long position at the current price of 2000 USD per ETH. The initial premium to pay upfront is 9.9 USD(or 0.1% of total debt), which depletes at an initial hourly rate of 0.01%/hr. Let us examine the following possible outcomes. ### A) Price Goes Up by 2% **In 1 hour**, the price of ETH is up 2%. *Regardless of the price movement of ETH during that hour*, you close your position and you have made a 2\*100 = 200% gain for your initial 100USD, which is 200USD. Your premium depleted is 0.99USD(0.01% of 9900USD) so you get back 9.9-0.99 = 8.91 USD back. Your total profit after the hour is 200–0.99 = 199.01 USD, or 199.01%. {% hint style="info" %} In reality, premium depletion rates are variable on a per-block basis, but here we are assuming 0.01% is the average value quoted over 1 hour. Also keep in mind that any volatility within the 1 hour has negligible impact on your final PnL, affecting only the total premiums depleted. {% endhint %} ### **B) Price Goes Down by 2%** **In 1 hour**, the price of ETH in USDC is down by 2%. You are far below your ‘liquidation price’, but you still have your position open. However, if you're pessimistic that the price will rebound to your entry price, you can opt to close your position to halt premium payments. In doing so, you would retrieve 8.91 USD from the initial premium, calculated as 9.9 - (9900\*0.01%), but would lose the entire 100 USD margin. ### C) A long time has passed **After 10 hours,** your premium deposit is depleted, and you forgot to replenish your premium deposit. Regardless of the magnitude of your unrealized PnL, your position will be forcibly closed and you will automatically regain your margin+ PnL. ### D) Price Goes Down 0.5%, which is the price range where you borrowed from. In such instances, you can only close your position and retrieve your remaining margin **via closing your position with limit orders**. An off-chain rebalancer will fill your order and transfer to you your margin + PnL. ### --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://limitless.gitbook.io/limitless/intro/example-trade.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.