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Shorting & Lending

Interactive guide — drag the slider to see how money moves.

How The Contract Works

As a Lender

  1. List your shares for lending. Your shares are locked once listed. The borrow fee is set by the system for each universe.
  2. Cancel your offer anytime before it gets matched. You can also set automation rules to cancel at certain price levels.
  3. When matched, you receive the borrow fee immediately. Your shares are sold by the system to existing buyers.

As a Short Seller

  1. Choose the stock and how many shares to short. The system automatically matches you with available lenders.
  2. The system sells the borrowed shares to existing buyers at their bid price. The sale proceeds go straight into escrow — you never hold the cash.
  3. You put up collateral to cover the gap between the sale price and the max payout price, plus the borrow fee. That's all that comes out of your account.

When Matched

The borrowed shares are sold to existing buyers. The escrow always equals the universe's max payout price. The sale proceeds cover most of that — the shorter only puts up the difference between the max price and the sale price as collateral.

Example: If the max payout is $2.00 and shares sell for $1.40, sale proceeds ($1.40) go into escrow and you add $0.60 as collateral. Your out-of-pocket is just $0.60 + the borrow fee.

Settlement

The shorter can buy back shares at any time to close early. Season-end settlement is planned but not active yet. The lender gets their share back plus any profit share earned from a price drop.

Price Simulator

Close Price$1.10

Drag to simulate the price when the short position closes.

Max Payout$2.00Highest payout in this universe
Entry Price$1.40Estimated sale price
Lender Cut20%Default rate
Borrow FeeNoneNo borrow fee
Order Book FillExample1 of 1 share filled
$1.40
1/3
$1.39
2
$1.36
6

All shares fill at the best bid. Increase the share count to see how deeper fills lower your average entry price.

$0.00$2.00
Breakeven $1.40
Entry price $1.40
Short Seller+$0.23
Escrow refunded$0.84
Collateral posted$0.60
Fee paid$0.00
Net P&L+$0.23
Max loss -$0.60Max gain +$1.11
Lender$0.05
Fee income (guaranteed)$0.00
Profit share (20%)$0.05
Cash earned$0.05
Lending saved you$0.05

Your share dropped $0.29 in value. Without lending, that's a pure loss with nothing to show for it. The borrow fee and profit share cushioned $0.05 of that drop.

Escrow Breakdown

Total locked: $2.00
Buy back
Shorter
Cost to buy back: $1.10
Lender profit share: $0.05
Shorter refund: $0.84

Shorting

If the price falls you profit. If the price rises you lose — capped at your collateral plus the fee.

Upside

  • Profit when a team's price goes down.
  • Close early whenever sellers are available.

Risk

  • Escrow is locked while your short is open.
  • Losses grow if price rises, up to the max payout.

Lending

Earn fee income from your shares. If the price drops, lending income helps offset the decline in value.

Upside

  • Earn fee income and a profit share without selling.
  • Cancel unmatched offers any time.

Risk

  • Locked shares can't be traded until released.
  • You may miss selling at a higher market price.

Safety Rules

  • Short opens match against qualifying third-party bids (self-dealing is blocked).
  • Each short locks enough escrow so obligations are always fully covered.
  • Shorting and lending require verified identity status.
  • Lenders can set automation rules to cancel offers or list shares at certain price levels.

Sign In Required

Sign in to enable shorting and lending on your account.