# Order Cost

### Order Placement

When a user places a new order, we check that the Available Balance for Trading is greater than or equal to the Order Cost, where:

* Available Balance for Trading = Equity - Initial Margin for Open Positions and Orders
* Order Cost for Buy Orders = max(Initial Margin Rate \* New Order Price \* (New Order Size + min(0, 2 \* (Open Position Size + Triggered Buy Order Size 1+ … + Triggered Buy Order Size N))) - Open Loss, 0)
* Order Cost for Sell Orders = max(-Initial Margin Rate \* New Order Price \* (New Order Size + max(0, 2 \* (Open Position Size + Triggered Sell Order Size 1+ … + Triggered Sell Order Size N))) - Open Loss, 0)

In the equations above:

* Open Loss =  min(New Order Size \* (Mark Price - New Order Price), 0)
* Position / Order Size is positive for Long and Negative for Short

### Orders Cancellation

If the Available Balance for Trading becomes less than 0, all open orders except for reduce-only orders are canceled. Additionally, as long as the Available Balance is less than 0, the user can only place orders that reduce the size of existing positions.


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