What is a trade?

01

One thing for another

A trade is an exchange. When you buy, you give cash and receive a coin or a share. When you sell, you give it back and receive cash.

Every trade has two sides. For you to buy, someone else has to sell, and the two of you have to agree on a price. An exchange, a broker or a program on a blockchain is what brings the two sides together.

02

What a price is

The price on the screen is what the most recent trades happened at. It is not a fixed tag set by anyone.

When more people want to buy than sell at that price, buyers have to offer more and the price rises. When more want to sell, it falls. News, company results, rumours and moods all reach the price that way.

03

Why buying costs a little more than selling

At any moment there is a price buyers pay and a slightly lower price sellers get. The gap is called the spread, and it is a cost of every trade, on top of the fees. It is small for things that trade a lot and larger for things that trade little.

04

Profit and loss

Buy at $10 and sell at $12, and the gain is $2 for each unit, or 20%, before fees. Buy at $10 and sell at $8, and the loss is 20%.

Until you sell, a gain or a loss is only a number on the screen and can still change. It becomes real when you sell. In many countries, the United States among them, selling at a gain can be taxable; the rules of where you live apply, and Viru doesn't give tax advice.

05

On Viru

Before you approve a trade, Viru shows what you would get, the least you are guaranteed, and every fee. Nothing happens until you approve it yourself, and once a trade is confirmed on a blockchain it can't be undone.