Price Impact

Price impact exponents and price impact factors are configured per market and can differ.

Price Impact​

There may be a positive or negative price impact for increasing / decreasing positions and for swaps.

If the trade improves the long / short balance or tokens in the pool then there would be a positive price impact, otherwise there would be a negative price impact.

For increasing / decreasing positions, a positive price impact would result in a better entry / exit price. A negative price impact would result in a worse entry / exit price.

The purpose of this price impact calculation is threefold:

1. Promoting a balanced distribution of assets within pools,

2. Encouraging a balance of long and short positions,

3. Reducing the risk of price manipulation.

The price impact values can be viewed on the UI below the Order Ticket, in the Order summary, when making a trade.

Price Impact for a $20,000 Trade relative to OI Imbalance