> For the complete documentation index, see [llms.txt](https://crypta.gitbook.io/crypta/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://crypta.gitbook.io/crypta/probability-exchange/liquidity.md).

# Liquidity

Liquidity represents the amount of additional quantity available for traders to Long or Short in a market.

On Crypta, liquidity is not determined by an order book. Instead, it is determined by the amount of additional exposure the liquidity pool can accept while remaining within its risk limits.

As a result, Long Liquidity and Short Liquidity can differ depending on the current balance of long and short positions in the market.

Each market displays:

* **Long Liquidity** — the maximum additional quantity that can be opened Long.
* **Short Liquidity** — the maximum additional quantity that can be opened Short.

Available liquidity is calculated from the market's current exposure and the maximum exposure permitted for accepting new trades.

For each synthetic market, excess exposure is calculated as:

$$
E\_i = \left| \sum n\_{\text{Long},i} ;-; \sum n\_{\text{Short},i} \right|
$$

Where:

$$
E\_i = \text{Excess long vs short quantity for a given synthetic market}
$$

#### Market-Specific Liquidity Limit

A new trade cannot be accepted if it would cause exposure in an individual market to exceed:

$$
E\_i *\triangle\_{\max,i} \le 0.015*LP\_{NAV}
$$

The remaining capacity before this limit is reached determines how much additional liquidity is available for trades that increase the market's excess exposure.

#### Aggregate Liquidity Limit

A new trade must also remain within the aggregate exposure limit:

$$
\sum\_{i=1}^{k} E\_i *\triangle\_{\max,i} \le 0.025*LP\_{NAV}
$$

The remaining capacity before this limit is reached determines how much additional liquidity is available for trades that increase the market's excess exposure.

Available liquidity is therefore constrained by whichever applicable limit is reached first:

* the market-specific exposure limit, or
* the aggregate exposure limit.