# Position Lifecycle
This section describes how a leveraged prediction market position moves from creation to settlement. All user actions occur through the originating front-end. Dimes executes and maintains the underlying hedge and synthetic exposure through Multiply.
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**Opening a Position**
The user selects:
* a supported prediction market
* a direction (YES or NO)
* a leverage level
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**The terminal requests a quote from Multiply, passing information such as:**
* market and trader
* direction
* requested leverage
* notional demand and collateral value
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**Multiply evaluates:**
* current venue price and market microstructure
* hedgeability of requested size within slippage bounds
* required collateral and margin
* per-market, per-side, and per-user cap headroom
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**Multiply returns a firm executable quote that includes:**
* entry price and execution cost
* required collateral
* maximum allowed size (if clipped by caps or depth)
* implied liquidation price
* an expiry timestamp — the offer is only valid for a limited window. The `expires_at` field in the API response indicates the deadline. If the user does not execute before this time, the offer becomes invalid and a new quote must be requested.
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**Hedge-first execution**
If the user accepts, the front-end submits an execute call. Multiply executes the hedge on the external venue first.
* Only if the hedge fills within slippage bounds is the position created, user collateral is locked, and the synthetic leveraged exposure is established.
* If the hedge fails or slippage exceeds bounds, the order is rejected and no position is created.
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**Active monitoring**
The position becomes active and appears in the front-end's portfolio view. Once active:
* Multiply monitors margin, venue health, and eligibility continuously
* Limits and maximum leverage evolve dynamically based on market conditions
* The market may enter close-only if any eligibility threshold is breached
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[**Leverage decay (J-factor)**](https://docs.dimes.fi/leverage-and-risk/leverage-decay-j-factor)
* J-factor is Multiply's dynamic risk engine. It continuously monitors depth profile, odds dynamics, open interest microstructure, and resolution conditions, defining when leverage should be reduced.
* Leverage reduction is triggered only when microstructure conditions warrant it. On the winning side, this means leverage often remains intact through resolution. On the losing side, deteriorating microstructure typically triggers deleverage earlier, protecting both the user and the facility.
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**Liquidation** **(if triggered)**
* If a user's remaining collateral falls to maintenance margin at any point during the position lifecycle, Multiply liquidates the position. The hedge is unwound on the originating venue and all execution costs are deducted from the user's collateral. Because J-factor proactively reduces leverage as the position deteriorates, users are significantly better protected than under traditional frameworks. Forced liquidations under Multiply are rare.
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