Position Lifecycle
How positions are opened, monitored, hedged, and settled.
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.
Opening a Position
The user selects:
a supported prediction market
a direction (YES or NO)
a leverage level
The terminal requests a quote from Multiply, passing:
market ID and trader ID
side (YES/NO)
requested leverage
notional size
Multiply evaluates:
current venue price and order book depth
hedgeability of requested size within slippage bounds
required collateral and margin
maximum allowable leverage for that market, side, and trader
per-market, per-side, and per-user cap headroom
Multiply returns a firm executable quote that includes:
entry price and fully-loaded execution cost
required collateral
maximum allowed size (if clipped by caps or depth)
implied liquidation price
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.
Active monitoring
The position becomes active and appears in the front-end's portfolio view. Once active:
Multiply monitors margin, venue health, depth, spread, 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
As the position ages and approaches resolution, Multiply systematically reduces leverage along a predetermined decay schedule.
De-risking parameters are fixed at position entry based on time-to-resolution, depth profile, and open interest microstructure. Live market data triggers execution of each decay phase. The corresponding hedge is unwound proportionally as leverage decreases.
By the time the market enters its hazard window, levered exposure has reached zero. The user retains the residual unleveraged position.
Liquidation (if triggered)
If the 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, all execution costs are deducted from the user's collateral.
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