How Entry Prices, Margin and Perp Notional Relate

What a Papertrade trade looks like from the trader side, and where the execution price comes from.

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

Opening and closing trades

Choose a market, direction, margin and leverage. The position opens at Hyperliquid order-book mid and closes against a later BBO-mid read.

Who you trade against

The counterparty is the protocol LP. Papertrade does not run its own orderbook or match one trader directly against another.

Where the price comes from

The smart contract reads Hyperliquid best bid and ask state onchain and uses their midpoint as the execution reference.

Fees, funding and slippage

The supplied docs describe no funding cost, no spread and no user-paid gas for the normal relayed trading flow. Profitable closes are subject to asymmetric impact and protocol settlement economics.

Margin and markets

Each position keeps the margin committed at open; positions are not topped up or partially resized. The documentation describes BTC and ETH with leverage up to 1000× and a per-user position cap.

Trade state machine

A Papertrade trade can be understood as a sequence: user intent, permission validation, BBO read, market-limit checks, position state update and later settlement. Because the price reference and protocol accounting are separate concepts, an accurate market price does not guarantee that a new position can open if OI limits or other controls reject it.

Price, notional and margin are different variables

Entry price comes from the documented BBO-mid reference. Notional describes the synthetic exposure. Margin is the isolated capital committed to the position. Leverage connects margin and notional, which is why higher leverage can create large exposure from a relatively small amount of margin.

For risk analysis, read all four fields—price, margin, notional and bust price—rather than treating leverage as a standalone metric.