Deposit on a trade: how the security works
A deposit on a trade on the exchange is a security that both sides pay when a match is made. It is not spent and does not go to the platform: the sum is held as a guarantee and returned to both sides in full after the round of documents is accepted.
Only the side whose turn it was and which did not meet the deadline loses the deposit.
Why a deposit on a trade on the exchange is needed
The exchange matches binding orders and records the trade, but is not a party to the purchase and sale agreement. The deposit closes the gap between a formal match and actual performance: it is unprofitable for the sides to break the trade, because they answer for a breach with money.
The second function is symmetry. The exchange does not check the counterparty and does not read documents, so the risk is distributed mechanically: both participants pay the security, not only the buyer or only the seller.
Both sides pay it
Both the buyer and the seller pay the deposit when orders are matched. The sum is held rather than written off: it remains security for the whole time of the trade.
This is not an escrow and not an advance payment for the goods. The exchange does not hold money for the goods and does not participate in settlements between the sides — it only holds the security according to the rules of the platform.
To place an order a balance of $10 is needed. Top-up — from $10 to $10 000 via RollyPay. An unmatched order does not hold money: the security appears only at the moment of matching, when the trade has a second side.
When it is returned
The deposit is returned to both sides in full after the round of documents is accepted. The rule is the same for the buyer and the seller — there is no asymmetry in the return.
There is also a second scenario: until both sides have confirmed the trade, either of them may propose a cancellation by agreement. If the second agrees, the deposits are returned to both, and the sides part without losses.
If the counterparty broke the trade, your position does not suffer. The side that missed its turn loses its deposit, and the other gets its own back in full.
When it is lost
The deposit is lost in two cases: missing a deadline, when the turn was yours, and a voluntary exit from the trade while the deposit is held.
| Situation | Who loses the deposit | What happens to the second deposit |
|---|---|---|
| The trade is confirmed, documents accepted | no one | returned in full |
| Confirmation did not arrive within 24 hours | the side whose turn it was | returned to the second |
| Documents not sent within 5 days | the side whose turn it was | returned to the second |
| Documents not accepted within 5 days | the side whose turn it was | returned to the second |
| Voluntary exit from the trade | the side that exited | returned to the counterparty |
| Cancellation by agreement before confirmation | no one | returned to both |
| Breach by the counterparty | the counterparty | returned to you in full |
The countdown of the deadlines begins from the moment of matching, not from confirmation. Therefore a relaxed schedule of "we will sort it out tomorrow" does not work here: 24 hours for confirmation and 5 days for documents are counted from the match.
Common mistakes
- Considering the deposit a payment to the exchange. The sum is held and returned to both sides in full if the trade reached the acceptance of documents.
- Confusing the deposit with an escrow or an advance payment. The exchange does not hold money for the goods and does not carry out settlements between the sides.
- Delaying confirmation. 24 hours and 5 days are counted from the match, not from the moment when you opened the trade.
- Expecting that the exchange will check the counterparty. There is no check, but the risk of a breach is closed by a symmetrical deposit from both sides.
Frequently asked questions
What is a deposit on a trade on the exchange?
It is a security that both sides pay when orders are matched. It is held for the time of the trade and returned in full after the round of documents is accepted. The deposit is not a payment to the exchange or an advance payment for the goods.
Who pays the deposit on a trade?
Both sides: the buyer and the seller. Symmetrical security replaces the check of the counterparty, which the exchange does not conduct. An unmatched order does not hold money — the deposit appears only at matching.
When is the deposit returned?
After the round of documents is accepted — to both sides in full. The deposits are also returned to both if, before confirmation, both sides agreed to a cancellation by agreement. If the counterparty missed its turn, you get your deposit back in full.
In what cases is the deposit lost?
If you did not meet the deadline when the turn was yours: 24 hours for confirmation or 5 days for the exchange and acceptance of documents. And if you exited the trade voluntarily while the deposit is held: your deposit is lost, the counterparty's deposit is returned to it.
Can one exit a trade?
Yes, at any moment while the deposit is held. On exit your deposit is lost, and the counterparty's deposit is returned to it. It is cheaper to agree on a cancellation by agreement before confirmation — then the deposits are returned to both.
Does the exchange hold money for the goods?
No. The exchange does not hold money for the goods, does not provide escrow and is not a party to the agreement. It holds only the security on the trade and returns it according to the rules of the platform. Settlements for the goods go between the sides directly.
Does the deposit replace a check of the counterparty?
No, but it performs a close task. The exchange does not check the counterparty, but both sides risk equally: they answer for a breach with the deposit. This makes a binding order genuinely binding.
Start a trade with security
The deposit is paid at matching — before that the order costs nothing. Check that you have a balance of $10 and an understanding of the deadlines: 24 hours and 5 days are counted from the match.