Articles on: Trading


Morpher does not charge any trading fees, however you still have to remain mindful of the spread when you trade. Spreads change constantly depending on the volatility of the underlying asset and the amount of leverage you use.

Introduction to Spreads

In trading, spread is the difference between two prices: the bid and ask prices of an asset. The bid is the price level at which traders are buying the asset, while the ask (or offer) is the price level at which traders are selling the asset. With any broker, traders pay the spread on every trade - like a fee.

On Morpher, the spreads are mainly based on the volatility of the market. They're intended to reflect the bid/ask difference you'd see on other exchanges. You have to account for spreads on every trade, whether you're closing a position or opening a new one.

Volatility Increases Spreads

Markets with higher volatility will have bigger spreads. Stay cautious when trading volatile markets as they can reduce some of your returns through spreads. It can sometimes be worth waiting for the market to calm down before placing your trade.

Leverage Increases Spreads

Higher leverage also comes with higher spreads. This is because leverage is like trading with borrowed capital. If you were to make a trade with 2x the amount of money, you would have spent 2x the amount on spread. That's why a 2x leveraged trade ends up costing you 2x the spread. It reflects the real world costs of leverage/margin trading.

How to Avoid High Spreads

Trade markets that have not moved much over the last few days.
Use less leverage.

Keep an eye out for the ⚠️ High Spread Warning when placing a trade. It indicates spreads are above 1% for that market.

Market Price and Spreads

If you're used to bid/ask spreads, you might be a bit confused as to why we sometimes add the spread to the price and other times subtract it. The trade terminal will always show you if its adding or subtracting from price, just click the dropdown next to Market Price when making a trade.

Subtracting Spread from Price

Spread is subtracted from the price whenever you are closing a position, including if it's only a partial close. Why subtraction? Because with a lower market price, your total position value is slightly less. You end up redeeming a smaller total value.

Adding Spread to Price

The spread is added to the market price whenever you enter a new position, long or short. It is also added to the price if you are trading in the same direction as your existing position (ie doubling down). Why addition? Because with a higher market price, you end up buying less "shares" of the underlying market. Your final position is worth slightly less because you were able to buy/sell a smaller piece of that market.

Why does Morpher have spreads?

The eagle-eyed Morpher fan will note that there is no exchanging on Morpher, traders are not matching buy/sell or purchases/sales. This is the reason for bid/ask spreads on other exchanges. Moreover, you might also not expect spreads on Morpher because of the infinite liquidity. Spreads reflect the liquidity of a market, a perfectly liquid market has infinitely small spreads.

On Morpher, spreads represent the reality of trading the underlying market. Without spreads, a host of new profitable trading strategies are possible, that would never work in the real world. While Morpher comes with many unfair advantages, this is not one of them. More importantly, spreads are a key part of the MPH token economy. Every trade burns a little bit of MPH, helping keep supply down. This deflationary pressure helps support MPH value for token holders. Learn more about Token Supply.

Updated on: 13/12/2023

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