Quote from: SuperClam on November 30, 2015, 10:37:03 PM

Quote from: dooglus on November 30, 2015, 10:22:32 PM

Quote from: SuperClam on November 30, 2015, 10:09:32 PM

Quote from: smooth on November 30, 2015, 10:08:08 PM

Quote from: SuperClam on November 30, 2015, 10:06:21 PM

The small purchases are made to cover loses incurred by the short-selling (if price goes up after a short-sale, the portfolio has lost 'value', and must purchase CLAM to cover that loss).
At least, that is my understanding of it.

Small price changes normally wouldn't cause margin calls. You have to lose enough to drop below the minimum required equity first. Of course that depends how leveraged you are. Poloniex allows something like 4:1 leverage I believe, though some of the BTC margin exchanges allow some really crazy stuff like 50:1 or maybe even 100:1

Conceptually that is correct though, right?

I'm not sure what you're getting at with "the small purchases". There aren't any small purchases.

If the price goes up high enough that you're getting close to being unable to afford to buy back the CLAMs you sold then you will be margin called, and the BTC you used as collateral plus the BTC you made by selling the borrowed CLAM will be used to buy the CLAM back so you can make the lender whole.

Direct from Poloniex staff, some time ago, I was informed that many of the tiny little orders were the margin system/users covering itself.

If someone is close to the margin limit and the price moves a little, then yes there will be small trades generated to close part of the position, just not always.