Properly managing your borrow and lend positions is crucial to optimize returns and mitigate risks. Here’s how to keep your positions in check.
Managing Borrow Positions
Repay Borrowed Assets
To reduce your liability, select the asset you want to repay from the Borrow section, enter the amount, and confirm the repayment.
When might you consider repaying?
- If your margin level is approaching the maintenance threshold
- If borrowing interest rates increase significantly
- If the value of your collateral declines in volatile market conditions
Add Collateral
To improve your margin level and reduce the risk of liquidation, you can add more collateral to your account
Tip: Maintain a buffer above the maintenance margin requirement to avoid sudden liquidation during market volatility
Monitor Margin Fractions:
- Initial Margin Fraction (IMF): The minimum margin level required to open new positions.
- Maintenance Margin Fraction (MMF): The margin level that must be maintained to avoid liquidation.
What to watch:
- Falling below MMF may trigger liquidation
- Staying close to MMF increases sensitivity to price movements
Managing Lend Positions
Redeem Lent Assets
To withdraw assets from the lending pool, go to the Lend section, select the asset, and enter the amount to redeem.
Note: If Auto-Lend is enabled, manual redemption may not be available.
When might you consider redeeming?
- If you need liquidity for trading or withdrawals
- If lending rates decline and no longer meet your expectations
- If market conditions change and you prefer holding assets directly
Auto-Lend Feature
Enable Auto-Lend to automatically lend available assets and participate in lending markets without manual intervention.
Note: Auto-Lend can be useful for idle assets, but it may still be helpful to monitor rates and market conditions periodically.
Best Practices
- Maintaining a buffer above the maintenance margin level may help reduce liquidation risk
- Monitoring positions regularly can help you respond to changing market conditions
- Using less volatile assets as collateral may reduce exposure to sudden price swings
- Subaccounts can be used to separate strategies and manage risk more effectively
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