Multiply: How to Close a Position

When closing the multiply position on Superposition, users should be aware of the high slippage resulting from closing the leveraged position.

Reminder: What is Slippage?

Slippage occurs when trading an asset and is the difference between the expected price of a trade and the price at which the trade is actually executed. When closing a multiply position, the leveraged balance is being traded and thus the slippage is scaled based on the leverage.

Real Time Example

Let’s take an example where a user is closing a Multiply position with 10 APT deposited with 10x leverage —

1. When establishing the position, the user’s APT after leverage (100 APT) is being converted into liquid staking derivatives (ex. sthAPT) along with 90 APT in debt.
2. When closing the position, the 90 APT debt needs to be repaid. Therefore, the first step is to exchange the liquid staking position back to APT in order to pay down the debt.
3. Assuming the APT price is $10, and the sthAPT position is now worth $1,100. When the sthAPT position is sold, it incurs a 0.5% slippage, or $5.5.
4. While $5.5 is a 0.5% slippage on the leverage balance, it is a much higher % compared to the original deposit
5. The higher the leverage, the higher the impact of slippage would have on your position.
6. The leveraged return offsets the slippage in similar fashion, but the return needs time to accrue.

Users are advised to research and evaluate the slippage impact prior to closing the Multiply position. The Superposition Labs team will release new features that support different methods for closing the position to alleviate slippage impact, stay tuned on our social channels for updates.

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