Trading Interface
Hyperliquid's trading interface is built on a vAMM backed by the HLP vault, delivering up to 50x leverage on perpetual futures with sub-second settlement. Unlike centralized perpetuals exchanges, every position settles on-chain with no counterparty risk from a central operator. This page explains the mechanics of how positions work, how leverage amplifies both gains and losses, and how funding keeps perp prices anchored.
vAMM Mechanics
The virtual AMM maintains a price curve without holding trader funds. Position PnL is settled against the HLP vault pool. Watch how the vAMM price reacts as long/short imbalance changes.
Leverage & Margin Calculator
Configure your position. The leverage slider goes up to 50x - note how quickly liquidation approaches. Try the margin calculator to see how much collateral you need at different leverage levels.
Funding Rate Mechanics (8h Settlement)
Funding payments keep perp prices anchored to spot. Positive rate = longs pay shorts; negative = shorts pay longs. Select a market to see how its current funding rate affects carry cost.
Liquidation Price Calculator
Enter your entry price and leverage to see your exact liquidation price. The visual shows how close you are to liquidation at the current price.
Position Lifecycle
Order Types Quick Reference
| Order Type | Description | Fees | Risk |
|---|---|---|---|
| Market | Filled immediately at best available price. Walks up the book. | Taker 0.035% | Slippage |
| Limit | Rests in book until filled or cancelled. Sets price ceiling (buy) or floor (sell). | Maker rebate | Not filled |
| Stop-Loss | Converts to market order when trigger price hit. Limits max loss. | Taker 0.035% | Gap risk |
| Take-Profit | Converts to limit order at target price when triggered. Locks in profit. | Taker 0.035% | Partial fill |
| TWAP/VWAP | Time/Volume-weighted average. Splits large orders over time to reduce impact. | Taker 0.035% | Execution risk |
Trading mechanics in 90 seconds
Every position on Hyperliquid is a perpetual futures contract. When you open a long, you are agreeing to pay (or receive) the difference between your entry price and the settlement price at close - you never take delivery of the underlying asset. The vAMM provides the indicative price that all positions mark against.
The HLP vault is the structural counterparty to all positions. When you go long and the price rises, HLP pays your profit from its pool. When you go long and the price falls, your loss is added to HLP's pool. The spread HLP earns on each fill partially offsets this - which is why HLP can remain profitable even when individual traders win. The system is zero-sum gross, but HLP's spread income makes the vault's expected return positive in non-trending markets.
Funding rates are the mechanism that prevents the vAMM price from drifting too far from the spot index. When longs are dominant and pushing the perp price above spot, longs pay shorts - this encourages closing longs and opening shorts, pushing the perp price back down. The funding rate is the thermostat of the perpetual pricing mechanism.
Key concepts
- Position size
- The notional value of your open position, determined by margin leverage. A $1,000 margin at 10 leverage controls a $10,000 position. Your profit or loss is calculated on the $10,000, not the $1,000. This is why leverage amplifies both gains and losses by the same multiplier.
- Mark price vs index price
- The index price is the underlying spot price (weighted average of major exchanges). The mark price is the vAMM's reference price used for PnL and liquidation - it smooths short-term volatility to prevent manipulation triggers. Your position PnL is calculated against mark, not index.
- Funding payment
- A periodic cash flow between long and short position holders. If funding is +0.01% per 8 hours and you hold a $10,000 long, you pay $1.00 every 8 hours. Funding accrues continuously - even a small rate becomes significant over weeks of holding a leveraged position.
- Liquidation price formula
- For a long: Entry Price (1 ? 1/Leverage). For a short: Entry Price (1 + 1/Leverage). At 20 leverage, a long is liquidated when price falls 5% from entry. At 50, a 2% adverse move liquidates. This is why high leverage is dangerous - the margin for error disappears quickly.
- Maintenance margin
- The minimum margin ratio required to keep a position open, typically 50% of initial margin (at 10, 5% of position value). Below this threshold, the position enters the liquidation queue. The liquidation engine attempts to close the position at the best available price and returns remaining collateral after deducting fees.
- ROE (Return on Equity)
- Return on Equity = Net PnL / Initial Margin. If you deposit $1,000 margin and earn $100 in profit, your ROE is 10%. ROE is the key metric for evaluating trading performance - it normalizes returns across different leverage levels.
Why the vAMM + HLP model matters
The vAMM + HLP architecture is a hybrid between order-book and AMM designs. The vAMM provides continuous price discovery without requiring an external AMM liquidity pool. HLP provides the capital backing that makes the vAMM economically functional - acting as the structured buyer of last resort for every long and the structured seller of last resort for every short.
This differs from GMX where GLP holders are the counterparty but the pricing comes from an oracle (Chainlink). On Hyperliquid, the vAMM price emerges from the aggregate positions of all traders and HLP's market-making activity - not from an external price feed. This makes Hyperliquid more robust to oracle manipulation but requires deep HLP participation to maintain tight spreads.
Frequently asked questions
- How does the vAMM on Hyperliquid work?
- Hyperliquid uses a virtual AMM (vAMM) architecture where the protocol maintains virtual reserves and uses a constant-product formula (x y = k) to derive indicative prices. Unlike a true AMM like Uniswap, the vAMM does not hold trader funds - it only provides a reference price. Actual position settlement happens against the HLP vault pool, which absorbs net PnL. The vAMM price moves based on the net position imbalance: if there are more longs than shorts, the vAMM price rises to encourage selling and reduce the long skew.
- What is the maximum leverage on Hyperliquid?
- Hyperliquid supports up to 50x leverage on BTC-PERP and ETH-PERP. Other assets have varying maximums based on liquidity and risk parameters. At 50x, a 1% adverse price move against your position wipes out 50% of your margin. At 50x a 2% move wipes out your entire margin. This makes high-leverage positions extremely risky - a liquidation is nearly certain during any significant market volatility. Beginners should stick to 3-10x leverage.
- How does HLP serve as the perpetual liquidity provider?
- HLP posts orders on both sides of every market - large bids below mid and large asks above mid. When a trader buys (long), HLP's ask gets filled and HLP accumulates a short position. HLP then hedges this short in the spot market or by adjusting its next quote to be slightly higher, balancing its inventory. The spread earned on the fill is HLP's primary revenue, regardless of whether the trader ultimately wins or loses. This makes HLP structurally profitable in calm markets and vulnerable during sustained one-directional moves.
- How does funding rate settlement work?
- Funding rates are calculated every 8 hours as the premium of the perpetual price over the spot index price. If the perp trades above spot, longs pay shorts - this incentivizes selling to close the gap. The funding payment is a percentage of the position value, not a fixed amount. On Hyperliquid, funding settles every hour at 1/8th of the 8-hour rate. A trader with a $10,000 long position in a +0.01% per-hour funding environment pays $1.00 per hour, or $24 per day.
- What determines my liquidation price?
- Your liquidation price depends on your entry price and leverage. At 10x leverage (10% margin of position value), your position enters liquidation when the price moves 10% against you. Long liquidation at 10x: entry 0.90. Short liquidation at 10x: entry 1.10. The formula is: Liquidation Price = Entry Price (1 +/- 1/Leverage) depending on direction. Cross-margin means all your positions share one margin pool - if one position gets liquidated, it affects your total portfolio margin.
- What happens to my position if the market gaps past my liquidation price?
- If price gaps downward past your long liquidation price (due to a sudden crash with no intermediate prices), your position is liquidated at the first available price after the gap - which could be significantly worse than your stated liquidation price. This is called slippage beyond liquidation. The protocol fills at the worst possible price in the gap, meaning you could lose more than your deposited margin. This is a known risk of leveraged trading, especially in illiquid or volatile conditions.
- How does cross-margin affect my risk?
- Hyperliquid uses cross-margin by default - all your positions share a single margin balance. This means profits from one position can support losses in another. However, it also means that if ANY position loses enough that your aggregate margin ratio falls below maintenance margin, ALL positions are at risk of liquidation. A trader who is long BTC and short ETH might feel balanced, but if BTC drops 20% while ETH only drops 5%, the net loss could liquidate both positions.
- What are the fees for trading on Hyperliquid?
- Taker fee: 0.035% per fill. Maker rebate: $0.20-$0.50 per contract (paid by the protocol as a rebate for adding liquidity). Funding payments are separate and depend on market conditions. A trader doing a round trip (open + close) pays 0.035% 2 = 0.07% in taker fees, plus any funding costs. Over a year of holding a position, funding can easily exceed the trading fees - always check the current funding rate before opening a position you plan to hold.