what exactly is the shock price? i have an open ETH long with a liquidation price of ~$1200 but the shock price is ~$1800 so im unsure what it actually means.
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Great question! The shock price is part of the risk engine’s Available Margin calculation. What the risk engine is doing fundamentally is looking at the dollar value (more accurately, the USDM value) of your portfolio if the market were to move against it.
It does this on a per-asset basis. So, let’s say you are net long ETH, like in your example. Then, the risk engine asks “what would be the dollar value of your ETH if the price of ETH went down?” The natural question from there should be “down by how much?” and the answer to that is the shock price. The shock price is the price at which the risk engine is valuing your ETH position(s) - the result is the dollar value that your ETH position(s) contribute to your available margin.
Here’s a related post with a video of me explaining the risk engine: How does margin work?
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