# Trading Notes

This document provides a comprehensive overview of the core trading mechanics on Aqua. Understanding these concepts is essential for a safe and efficient trading experience.

### Margin System

By default, all accounts on Aqua utilize a cross-margin system. This approach treats your entire account balance as a single pool of collateral, allowing profits from one open position to automatically offset losses from another. This method enhances capital efficiency and can reduce the likelihood of liquidation for individual positions during market volatility.For settlement, all trading activities on Aqua—including profits, losses, fees, and funding payments— are denominated and settled in USDC for clarity and simplicity.

### Risk Management

**Leverage**

Leverage allows you to control a larger position with a smaller amount of capital, amplifying both potential profits and losses. You can select your desired leverage for each trade. We strongly encourage all users, especially those new to derivatives, to use leverage responsibly and start with lower levels until they are comfortable with the associated risks.

**Social Trading**

When you use our social trading features, such as following or inversing another trader, you are still in full control of your risk. You can set specific capital allocations for each social strategy and can disconnect from a trader at any time. Remember that past performance is not indicative of future results.

**Liquidation**

If a market move causes your margin balance to fall below the required maintenance margin level, your position may be automatically closed by the system to prevent further losses. This process is known as liquidation. While our cross-margin system helps mitigate this risk, it is crucial to monitor your account health and use leverage wisely.

### Fee Structure

Aqua charges a service fee on the notional value of every trade. Our fee structure is designed to be transparent and competitive.

| Trade Type        | Service Fee      |
| ----------------- | ---------------- |
| Standard Trades   | 5 bps (0.05%)    |
| Innovative Trades | 5.5 bps (0.055%) |

* Standard Trades include any manual trades you execute yourself.•Innovative Trades include any automated trades executed via our social and strategic features, such as Celebrity Copy Trading and AI Agents.Fees are always displayed transparently on the confirmation screen before you execute a trade and are deducted from your account balance in USDC.

### Funding Rates

Perpetual contracts on Aqua employ a funding rate mechanism to ensure the contract price stays closely aligned with the underlying spot market price. Depending on your position (long or short) and prevailing market conditions, you will either pay or receive these funding payments periodically. You can view the current funding rate for each market directly on the trading screen.<br>

USDC deposits are processed via Relay.link. A small network/processing fee may apply.

* For deposits **under 1,000 USDC**: typically **0.02 – 0.05 USDC**
* For deposits **above 1,000 USDC**: approximately **0.02% (2 bps)**
* Final fee may vary depending on on-chain congestion and routing conditions

The exact fee and estimated arrival time will be shown before you complete the transfer.


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