TL;DR
- Merchants with open positions generally want liquidity, however closing a working place to boost capital isn’t all the time the proper transfer
- Flexline allows you to borrow in opposition to your holdings with out closing your positions, so the capital turns into accessible and the place stays intact
- Mounted charge, recognized upfront: your borrowing price earlier than you commit
- Charges: 10–25% APR (mounted). Phrases: 2 days to 2 years. Customizable LTV
Most merchants think twice about entry and exit. Fewer take into consideration what occurs when a place is open and so they want capital for one thing else: one other alternative, a short-term price, one thing that gained’t wait. The intuition is to shut one thing. However closing a place that’s nonetheless working isn’t all the time the proper name.
This submit is for the dealer who has lively positions, wants liquidity, and doesn’t wish to unwind what’s already working to get it.
The place that’s working
Alex has been on Kraken Professional for 2 years. He has a number of lively positions, some operating for weeks, others for months. He’s not buying and selling to shut shortly. He builds positions round a thesis and lets them run.
The issue he retains operating into is liquidity. His capital is deployed in positions which might be working. When a brand new alternative seems, or when he wants money for one thing exterior the portfolio, the apparent transfer is to shut one thing. However closing a place mid-thesis to boost capital is a commerce he didn’t wish to make.
What he wanted was a technique to entry liquidity with out the positions themselves being a part of the equation. Not closing them, not restructuring them: simply borrowing in opposition to what he holds, at a set price he can plan round, whereas every thing else stays open.
“The market doesn’t wait so that you can shut a place. Flexline means I don’t need to.”
Flexline lets Alex borrow in opposition to his current holdings, BTC, ETH, or any of the 48 supported belongings, at a set charge, for an outlined time period. The positions he’s constructed keep open. The capital turns into accessible. He can deploy it into a brand new alternative, cowl a short-term price, or maintain it as a buffer: regardless of the state of affairs requires.
The speed is mounted for the total time period. He is aware of what borrowing prices earlier than he commits. He can select a time period that matches the timeline, two days to 2 years, and dimension the mortgage to what he really wants.
Preserving each
Alex spots a brand new alternative whereas two current positions are operating. The capital he’d want is tied up in these positions. The choices are: shut one of many operating positions, move on the chance, or discover one other means.
With Flexline, he borrows in opposition to his holdings at a set charge for an outlined time period. He doesn’t shut both operating place. The capital is there. The present positions keep intact. He can pursue the brand new alternative on the identical foundation he would have if his capital wasn’t already deployed.
The borrowing price is mounted and recognized earlier than he commits. He chooses the time period to match the timeline: shorter if he expects to repay shortly, longer if he wants extra runway. Both means, nothing he’s already constructed will get touched.
The positions keep. The capital strikes.
What Flexline has modified for Alex is the choice he used to face at any time when he wanted capital and his portfolio was absolutely deployed. That call, which place to shut, how a lot to surrender, what the timing price could be, is not the one path.
He borrows in opposition to what he holds, at a charge he agreed upfront, for a time period that matches his state of affairs. The positions run. The capital works. The fee is thought from day one.
Why Flexline suits:
- Positions keep open: borrow in opposition to your holdings with out closing what’s already working
- Customizable LTV: management how a lot you’re borrowing relative to your collateral
- Core holdings preserved as collateral: long-term positions keep intact whilst you deploy capital elsewhere
- Phrases from 2 days to 2 years: match the time period to your timeline; shorter phrases carry decrease charges
What to consider earlier than you borrow
Flexline is a time period mortgage, not a buying and selling place. As soon as the mortgage is open, the speed is mounted for the time period. You possibly can repay early, however an early reimbursement payment applies. Take into consideration the time period size earlier than you commit.
LTV and liquidation. If the worth of your collateral falls to the liquidation threshold, your collateral will be liquidated to repay the mortgage. Kraken reveals you the place that threshold sits earlier than you borrow. Issue it into your place sizing.
Promote vs. borrow. Flexline is smart while you wish to maintain your positions intact and may service the mortgage price. If the borrowing price outweighs the worth of holding the place, promoting should still be the higher choice. The choice is determined by your particular state of affairs.