Open Interest Limits for Long and Short Exposure

Open-interest controls limit how quickly and how far protocol exposure can grow in a market direction, even when the underlying BTC or ETH market remains active.

Official Papertrade documentation · Updated November 5, 2026 · Canonical domain: papertrade.finance

What open interest means

Papertrade open interest is the active synthetic notional exposure that remains open. Long OI and short OI are tracked separately because each direction creates a different protocol exposure profile.

Directional capacity

A market can have remaining long capacity while short capacity is constrained, or the reverse. This is why a visible BTC or ETH market does not guarantee that every new position request can be accepted at every moment.

Position size vs market OI

Per-position limits and market-level OI controls solve different problems. A single trade can be below its atomic position ceiling while the requested direction is already near its market headroom. Both checks can matter before an intent is accepted.

Why OI is a risk control

Papertrade's protocol LP is the counterparty to synthetic trader PnL. Limiting directional growth constrains how quickly protocol exposure can become concentrated. OI limits reduce one category of risk but do not eliminate market, liquidation or solvency risk.