Margin trading on Abyss
In the following we will explore how to trade on margin on Abyss.
Beyond Spot trading, Abyss also offers Margin trading. Margin allows traders to take on leverage on top of their assets to trade with more than they actually have. This obviously allows traders to potentially make more but they also can lose proportionally more and be at risk of getting liquidated.
Key Concepts
Leverage
Leverage allows you to control a larger position than your deposited collateral would normally allow by borrowing additional funds.
1x: No leverage (trading with only your own capital)
3x: Your position is 3 times your collateral
5x: Your position is 5 times your collateral
Example: With $100 collateral and 5x leverage, you can open a $500 position. Profits and losses are amplified by the leverage factor.
Margin Manager
A Margin Manager is a smart contract account that:
Holds your collateral (base assets, quote assets, or DEEP)
Tracks your borrowed amounts
Manages your leveraged positions
You can create multiple margin managers to separate different trading strategies.
Collateral
Collateral is the assets you deposit to secure your leveraged positions. Acceptable collateral types:
Base asset (e.g., SUI)
Quote asset (e.g., USDC)
DEEP tokens
Your collateral value is calculated in USD equivalent for risk calculations.
Risk Ratio
The risk ratio measures the health of your position:
≥ 2.0
Healthy
Withdraw freely
1.25 - 2.0
Moderate
Can borrow more
1.1 - 1.25
At Risk
Must repay or add collateral
≤ 1.1
Liquidation
Position closed automatically
Liquidation
If your risk ratio falls below the liquidation threshold, your position will be automatically closed:
SUI/USDC
1.1x
WAL/USDC
1.2x
DEEP/USDC
1.2x
When liquidated:
Your position is sold to repay the borrowed amount
A 2-3% liquidation reward is paid to the liquidator
Remaining collateral (if any) stays in your margin manager
Getting Started
If it's your first time you will be prompted to create a new margin account for the market you've selected. Let's take SUI/USDC for our example. You can deposit one of three assets at a time into your margin account: the base asset (SUI ) the quote asset (USDC) or DEEP (to pay less trading fees). The margin account also shows you the amount of borrowed assets it currently has and the risk ratio dropdown gives you an idea of how healthy the position is and what functions are available to you based on your current risk ratio.
Opening a Position TLDR
Select Trading Pair: Choose your pair from the trading header (e.g., SUI/USDC)
Create or Select a Margin Manager:
Use the Margin Manager Selector panel
Click "Create New" for a fresh margin manager, or
Select an existing one from the dropdown
Deposit Collateral:
Click the deposit button in the order placement panel
Select your asset type (SUI, USDC, or DEEP)
Enter the amount and confirm the transaction
Place Your Order:
Select Buy (long) or Sell (short)
Choose order type:
Market: Executes immediately at current price
Limit: Executes when price reaches your specified level
Enter quantity
Adjust leverage using the slider (1.0x - 5.0x)
Review the estimated liquidation price
Click "Place Order" and confirm in your wallet
If you wish to go short and long at the same time you will need to create two separate margin accounts for one market although there is not much use to doing this. You cannot borrow the base and quote asset at the same time.
The amount is automatically calculated based on your margin account balance and the leverage you selected. If you set 1x leverage no assets will be borrowed so it becomes a normal spot trade.
When you open the position Abyss automatically borrows the necessary amount and sells or buys based on the direction of the trade (Long or Short). You can choose to unwind the position by clicking to the right of the positions tab (this action sells all of the bought asset for the debt asset and repays the debt to deleverage your position).
If any dust remains you can always repay the leftover debt with the repay debt button in the margin account info.
Managing Positions
View your open positions in the Positions tab below the chart. Each position shows:
Entry price
Current price
Position size
Unrealized PNL
Liquidation price
Adjusting Collateral:
Add Collateral: Deposit more assets to increase your risk ratio
Withdraw Collateral: Remove excess collateral (only when risk ratio > 2.0)
Closing a Position
Method 1: Unwind
Click "Unwind" on your position
The system automatically sells to close and repays borrowed amounts
Method 2: Manual Close
Place an opposite order (sell if you're long, buy if you're short)
Repay any remaining debt using the Repay modal
Order Management
View Orders: Check the "Open Orders" tab for active orders
Cancel Orders:
Click "Cancel" on individual orders, or
Use "Cancel All" to cancel all open orders
Modify Orders:
Adjust quantity for limit orders
Update leverage settings
Limit orders and margin
Limit orders work very similarly to spot with the addition of margin. Your order will sit on the book with borrowed funds waiting to be executed at the predefined price. Once it executes the position will show up in the positions tab.
If you cancel a limit order the debt is not automatically repaid so you will need to manually repay the debt after.
Trade history and order history work in the same way as for spot trading.
Risk Management
Best Practices
Start with lower leverage: Begin with 2x or 3x before using maximum leverage
Monitor your risk ratio: Keep it above 1.5 to avoid liquidation risk
Use stop losses: Protect against unexpected market moves
Don't over-allocate: Only trade with funds you can afford to lose
Diversify margin managers: Separate high-risk and low-risk strategies
Understanding Liquidation Risk
Your liquidation price is calculated based on:
Your entry price
Position size
Leverage used
Collateral deposited
To avoid liquidation:
Add more collateral when risk ratio drops
Partially close your position
Set stop losses above liquidation price
Position Health Indicators
The interface shows color-coded risk status:
Green: Healthy (risk ratio > 2.0)
Yellow: Moderate (risk ratio 1.5 - 2.0)
Orange: At risk (risk ratio 1.25 - 1.5)
Red: Danger (risk ratio < 1.25)
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