The Beginner’s guide to trading on Nibbl

Welcome to a beginner’s guide on trading on Nibbl.

In this article, we’ll explore the basics of opening long and short positions, understand the role of leverage, and understand the fees involved in the process.

Meet Bob, our fellow trader. Let’s explore his trading experience on Nibbl.

Opening Long/Short positions

Bob kicks off his trading journey on Nibbl by getting the fundamentals straight. Going long means he’s putting his money on the underlying asset's price to go up. He profits when he closes the position after the expected price increase.

On the flip side, there’s going short, where he’s betting that a particular asset is overvalued. He’s in it to make a profit from the price drop.

Step 1: Connecting Wallet

Bob’s adventure begins with a visit to Nibbl’s trading page. The first step is to connect his wallet.

Step 2: Choosing your asset

On Nibbl, Bob can choose different NFT collections and assets to trade from the drop-down menu.

Step 3: Selecting to long/ short and leverage

Now comes the exciting part — Bob has to decide whether he’s going long or short on his chosen asset. This is where leverage comes into play. Leveraging his position on Nibbl is a breeze. Bob uses the slider to select his leverage after choosing to go long and enter the amount. Then, he clicks ‘open trade,’ and it’s done.

While Bob is opening his position, he must pay periodic payments to keep his position open. These are known as funding fees.

Let’s now see how Bob uses leverage.

In his case, he goes for a long position with 3x leverage.

With 3x leverage, Bob’s initial Maintenance Requirement (MR) stands at 33.3%. Let’s say the floor price of his Milady is 10 ETH. If it drops to 6.67 ETH, he will approach the first liquidation level. A bit nerve-wracking. But Bob’s got a hunch that Milady’s price is about to take off.

And he’s spot on! Milady’s price soars, reaching a staggering 25 ETH. Bob decides it’s time to close his position and count his earnings.

Step 4: Closing your position

To close his position, Bobs simply hits the ‘x’ icon and clicks close trade.

At a floor price of 25 ETH, Bob’s PnL is an impressive 4.07 ETH, excluding the funding payments and the minor transaction fees.

But here’s the kicker — while opening long/short positions is pretty straightforward, leveraging isn’t child’s play. It’s a high-risk, high-reward strategy. It can work wonders if played right, but it can also be a double-edged sword, magnifying losses.

So, Bob’s lesson learned — onchain asset perpetuals are no walk in the park. You’ve got to tread carefully, especially when using Nibbl’s product. But no worries, Bob’s got your back. He’s here to guide you with more educational articles to make your trading journey smoother.

Keep watching this space for more.

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