Available balances used for posting collateral and paying premiums
For connected wallets, collateral can be deposited and withdrawn with ETH balance and available collateral displayed. Clicking the Deposit Collateral button will deposit (increase) Available Collateral and reduce the Balance of the wallet displayed, and the Withdraw Collateral button will withdraw (reduce) Available Collateral and increase the Balance of the wallet displayed. The available collateral can be used to post collateral when selling options or to pay for the order (premium) price when buying options.
Order leverage refers to the fact that you can submit 10X your collateral on the buy/sell side, with none of the individual open positions exceeding your available collateral. For instance, if you have 10 ETH available, you can either create 10 orders worth 10 ETH each, 20 orders worth 5 ETH each or even 100 orders worth 1 ETH each. On the contrary, you cannot provide 5 orders worth 20 ETH each as that would exceed the amount of available collateral in your account.
If positions are filled or collateral is withdrawn, open orders with sizes that exceed the available collateral will be cancelled. A dynamic balance of open orders reflecting 10X order leverage will also be maintained when positions are taken out or collateral is withdrawn.
Test ETH (test) on the Arbitrum Goerli network will be used as collateral. The underlying NFT asset will never be used as collateral, and you do not need to own any of the items within the collection you are speculating on.
Collateral for each filled position is determined by multiplying order size by strike price with a 50% collateral ratio (i.e. 0.01BAYC * 55 ETH * 0.5 = 0.275 ETH collateral required).
The amount required for the option premium is determined by multiplying order size by order price for each contract (i.e. 2Azuki * 0.5 ETH = 1 ETH).