# How to Trade on Sharwa: Complete Guide

### Before You Start

**You need:**

* Wallet with Arbitrum network (MetaMask, Rabby, WalletConnect)
* $10+ in USDC, ETH, or WBTC

**What you'll be able to do:**

* Use ETH as collateral to trade BTC (cross-asset)
* Open leveraged positions up to 10x
* Add options to prevent liquidation
* Provide liquidity and earn yield

## Step 1: Create Your Margin Account

1. Connect your wallet to [Sharwa.finance](https://sharwa.finance/). 
2. Click "Create New Margin Account".

<figure><img src="https://3346192225-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FYYWndFWy1EJqix8duZFM%2Fuploads%2F9jWaBaP2zq1hgLZDCzN4%2F1.png?alt=media&#x26;token=63e8cfaf-4c44-4001-87d4-3ea40ad55aff" alt=""><figcaption></figcaption></figure>

You'll see a feature overview popup.&#x20;

Read it or skip – you can always come back to documentation.

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## Step 2: Deposit Collateral

1. Select asset: USDC, ETH, or WBTC.&#x20;
2. Sign 2 transactions:
   1. Approve&#x20;
   2. Deposit into margin account

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Now you can trade.

## Step 3: Understand your Margin Account

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#### Account Info #1

* Margin Level: Your account health percentage. Must stay above 110% to open positions, above 105% to avoid liquidation. We use Chainlink Price Feeds to calcualte your margin level.
* Account Balance at Liquidation: Shows how much value you'd have left if liquidated now. Helps you see risk.

#### Balances #2

* Account Balance: Total value of your collateral right now plus unrealized PnL
* Unrealized P\&L: Profit or loss on open positions (not yet closed)
* Unsettled P\&L: Profit or loss from closed positions waiting to settle.

#### Collateral #3

Shows your deposited collateral. If you want to swap collateral just click "Swap".&#x20;

#### Margin Account Positions #4

Lists all open positions:

* Leveraged long/short positions
* Options (puts and calls)

## Step 4: Start Trade

<figure><img src="https://3346192225-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FYYWndFWy1EJqix8duZFM%2Fuploads%2FaDK4CDFcOQRJKizNzvos%2F5.png?alt=media&#x26;token=4b778d76-d873-4b62-b6f7-e4d1711a7386" alt=""><figcaption></figcaption></figure>

**To open a position:**

1. Select direction: Long or Short
2. Enter amount / select leverage
3. Show amount of margin reserved for this position
4. Projected margin ratio after the position will be opened&#x20;
   1. Check Projected Margin Ratio: Shows your new margin level after opening position.Requirements:
      * Must be ≥110% to open
      * Should keep ≥150% for safety
      * Gets liquidated if drops to 105%

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After a position is opened, it will appear under Margin Account Positions

* Mark Price: based on the Chainlink price feed.
* PnL columns do not include opening/closing fees or interest rates.

## Step 5: Options Trading

**🛡️Options prevent liquidation. You pay premium upfront, get insurance against crashes.**

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You see the option chain – table of all available options with different strike prices and expiration dates.

**Select paratemers:**

1. Expiration Date (1 day or 3 day).
2. Direction:
   * Call: Profit when price rises (protects shorts)
   * Put: Profit when price drops (protects longs)

{% hint style="info" %}
You have long ETH position? Buy put option.
{% endhint %}

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1. Enter amount of contracts that you want to purchase. 1 contract = 1 ETH of coverage.
2. Select Payment method:
   1. USDC
   2. ETH
   3. WBTC

Check projected margin ratio after the position will be opened&#x20;

* Must be ≥110% to open
* Should keep ≥150% for safety
* Gets liquidated if drops to 105%

<figure><img src="https://3346192225-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FYYWndFWy1EJqix8duZFM%2Fuploads%2FIVf0UMYDLqLwJLD5EfKk%2F9.PNG?alt=media&#x26;token=3471f477-5fec-4515-8bdb-b2496feebc90" alt=""><figcaption></figcaption></figure>

If option is In The Money (ITM) at expiration, it exercises automatically 30 minutes before expiry. You get the profit added to your margin account balance in USDC.

## Step 6: Settling Your Account

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### What is Unsettled P\&L?

Trading fees that need final processing

### When to Settle

You closed all positions. Your account shows "Unsettled P\&L."Settle your account to withdraw all available collateral.

* Without settling: You can only withdraw part of your collateral.
* After settling: You can withdraw everything.

### How to Settle

1. Click "Settle Account" button.
2. Sign transaction

Your account processes all fees and updates your available balance.

<figure><img src="https://3346192225-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FYYWndFWy1EJqix8duZFM%2Fuploads%2FajnrFSLyQAN9j6PEQKsz%2FFrame%208.png?alt=media&#x26;token=3c12d01f-f8a6-4e31-b5f9-95b29ce4b441" alt=""><figcaption></figcaption></figure>

#### Why Always Settle After Closing Positions

1. Restores margin level to infinity. No liquidation risk.
2. Frees all collateral. Nothing locked, ready to withdraw or trade again.

{% hint style="success" %}

> Always Settle your account after closing positions — it restores your margin level to infinity, removing any liquidation risk.
> {% endhint %}

## 7. Earn

Earn passive yield by supplying assets to Sharwa liquidity pools.

### How It Works

Traders borrow from liquidity pools to open leveraged positions. You supply the assets. You earn the fees.

**Your role:**

1. Deposit USDC, ETH, or WBTC into a liquidity pool
2. Traders borrow from your pool for leverage
3. You earn borrowing fees automatically
4. Withdraw anytime (when pool has available liquidity)

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