# Traders

In this section we examine the competitive advantage of trading on Lynx. To see a tutorial on How to Open/Close a Trade, see:

{% content-ref url="/pages/RcmckXDDlCCWulsubyhB" %}
[Open/Close a Trade](/lynx-finance/for-users/tutorials/open-close-a-trade.md)
{% endcontent-ref %}

## Key Features for Traders

Traders can use almost any token as collateral to open trades. Using their favorite tokens, traders can get exposure to blue-chip instruments without needing to sell their holdings. For example, a UNI holder who wants exposure to BTC could enter a long position on BTC/USD using UNI as collateral. 

* Wide and Ever-Expanding List of Collateral Assets (eg. Stablecoins, Governance tokens, LSTs)
* Up to 500x leverage on tradeable instruments
* Competitive fees
* Self-custody trading with no sign-up 
* Guaranteed payouts for winning traders (read more [here](/lynx-finance/welcome-to-lynx/core-design.md#guaranteed-solvency)). 

## Selecting a Collateral Asset

Traders first select which collateral asset they want to use to open their position. This asset determines which liquidity pool the trader will be going against, as well as which asset their trade and trading fees will be settled in. For example, using TKN (a generic symbol representing any token) as collateral will result in any profit/losses being paid in TKN (see more [here](/lynx-finance/welcome-to-lynx/core-design.md#isolated-liquidity-pools)).

Regardless of the token used as collateral, the token's price has no impact on the health of the position. In other words, a drop in the token's price does not bring a trader closer to liquidation and an increase does not bring them farther from liquidation. 

To learn more about how the price of the collateral asset is not relevant to the health of a position, read [here](/lynx-finance/welcome-to-lynx/core-design.md#trader-profit-and-loss-pnl). 

{% hint style="info" %}
The price of the collateral asset does not affect the health of a trader's position
{% endhint %}

## Prices

Lynx utilizes a high-performance, on-demand price oracle to determine the entrance/exit price for trades. The use of such an oracle offers two main benefits:

1. Accurately reflects the current spot price of the traded instrument
2. Prevents oracle front-running 

While prices on Lynx are currently supplied by [Pyth](https://docs.pyth.network/documentation), Lynx looks to integrate with several reliable oracles so long as they possess the following features: 

* On-demand/pull model
* Allow anyone to broadcast prices
* Resiliency to Price Wicks (ie. by aggregating spot price data and effectively filtering irregular price movements on any given exchange)

The Lynx [app](https://app.lynx.finance/leverage?pairId=1\&chainId=1\&sa=weeth) uses TradingView technology to help traders track [Bitcoin price](https://www.tradingview.com/symbols/BTCUSD/) and other assets with high-performance, interactive charts. TradingView is a global platform offering heat-maps, alerts, Pine Script, and other tools for comprehensive market analysis.

## Liquidations

In Lynx, liquidations occur when a trader's losses - as calculated by [Net P\&L](/lynx-finance/community/glossary.md#net-profit-and-loss-net-pnl) - reach a threshold equal to 85% of their collateral. At this point, all losses and accumulated fees are deducted from the trader's collateral and sent to the corresponding liquidity pool. The remaining collateral is subject to Lynx's [liquidation fee](/lynx-finance/for-users/fees.md#liquidation-fee).

The *positionValue* that triggers liquidation **for a long position** is defined as:

$$
positionValue = (collateral \* leverage) - (0.85\*collateral)
$$

And the *positionValue* that triggers liquidation **for a short position** is defined as: 

$$
positionValue= (collateral *leverage) + (0.85*collateral)
$$


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