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Every forward position on Nile Markets has a side: either LONG or SHORT. Your side determines how your profit and loss responds to EUR/USD price movements. The pool always takes the opposite side of your trade.

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Two Sides of Every Trade

LONG (Side = 0)

Betting that EUR strengthens vs USDYou profit when the EUR/USD rate goes up. A move from 1.08 to 1.10 generates profit. A move from 1.08 to 1.06 generates a loss.

SHORT (Side = 1)

Betting that EUR weakens vs USDYou profit when the EUR/USD rate goes down. A move from 1.08 to 1.06 generates profit. A move from 1.08 to 1.10 generates a loss.
The Side enum is defined in Types.sol and mirrored in both SDKs: 
import { Side } from "@nile-markets/sdk";

Side.LONG   // 0
Side.SHORT  // 1

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LONG Position in Detail

A LONG position profits when the EUR/USD exchange rate increases. You are buying EUR and selling USD at a locked-in forward price. If EUR strengthens by the time the position settles, you profit. If EUR weakens, you lose. PnL Formula: 
LONG PnL = notional * (currentPrice - entryStrike) / PRICE_PRECISION
  • Notional: 1,000 USDC
  • Entry strike: 1.08000 (opened LONG at this forward price)
  • Settlement price: 1.10000
PnL = 1,000 USDC * (1.10000 - 1.08000) / 1.00000
    = 1,000 * 0.02
    = +20 USDC profit
The trader entered expecting EUR to strengthen, and it did. The 200-pip move (1.08 to 1.10) translates to +20 USDC on a 1,000 USDC notional.
  • Notional: 1,000 USDC
  • Entry strike: 1.08000
  • Settlement price: 1.06000
PnL = 1,000 USDC * (1.06000 - 1.08000) / 1.00000
    = 1,000 * (-0.02)
    = -20 USDC loss
The trader expected EUR to strengthen, but it weakened instead. The loss is deducted from the trader’s locked margin.

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SHORT Position in Detail

A SHORT position profits when the EUR/USD exchange rate decreases. You are selling EUR and buying USD at a locked-in forward price. If EUR weakens by the time the position settles, you profit. If EUR strengthens, you lose. PnL Formula: 
SHORT PnL = notional * (entryStrike - currentPrice) / PRICE_PRECISION
  • Notional: 1,000 USDC
  • Entry strike: 1.08000 (opened SHORT at this forward price)
  • Settlement price: 1.06000
PnL = 1,000 USDC * (1.08000 - 1.06000) / 1.00000
    = 1,000 * 0.02
    = +20 USDC profit
The trader entered expecting EUR to weaken, and it did. The 200-pip move generates +20 USDC.
  • Notional: 1,000 USDC
  • Entry strike: 1.08000
  • Settlement price: 1.10000
PnL = 1,000 USDC * (1.08000 - 1.10000) / 1.00000
    = 1,000 * (-0.02)
    = -20 USDC loss
The trader expected EUR to weaken, but it strengthened instead. The 20 USDC loss is deducted from locked margin.

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PnL Comparison Table

The following table shows how LONG and SHORT positions respond to the same price movements. All examples use a 1,000 USDC notional with entry strike of 1.08000.
EUR/USD MoveSettlement PriceLONG PnLSHORT PnL
+200 pips1.10000+20 USDC-20 USDC
+100 pips1.09000+10 USDC-10 USDC
+50 pips1.08500+5 USDC-5 USDC
No change1.080000 USDC0 USDC
-50 pips1.07500-5 USDC+5 USDC
-100 pips1.07000-10 USDC+10 USDC
-200 pips1.06000-20 USDC+20 USDC
PnL is perfectly symmetric between LONG and SHORT. For any given price move, the LONG profit equals the SHORT loss, and vice versa. This symmetry is a direct consequence of the zero-sum protocol design.

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Pool Exposure

The liquidity pool always takes the opposite side of every trader position. Understanding this relationship is important for both traders and liquidity providers.
The pool’s net exposure shifts negative (effectively short EUR/USD). If EUR strengthens, the pool pays the trader’s profit. If EUR weakens, the pool receives the trader’s loss.
The pool’s net exposure shifts positive (effectively long EUR/USD). If EUR weakens, the pool pays the trader’s profit. If EUR strengthens, the pool receives the trader’s loss.
The pool’s total exposure is the net of all open positions. If traders collectively hold more LONG notional than SHORT notional, the pool has net short exposure (and vice versa). The RiskManager enforces exposure caps to prevent the pool from becoming too directionally exposed.
The pool’s net exposure is tracked onchain and can be queried: 
poolNetExposure = totalShortNotional - totalLongNotional
A positive poolNetExposure means the pool is net long (more trader shorts than longs). A negative value means the pool is net short (more trader longs than shorts).

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Choosing a Side

  • You expect EUR to strengthen relative to USD
  • Macro indicators favor EUR (hawkish ECB, dovish Fed, improving Eurozone data)
  • You want to hedge existing USD exposure
  • Technical analysis suggests EUR/USD uptrend
Both sides carry symmetric risk. There is no inherent advantage to being LONG or SHORT — both have the same maximum loss (your locked margin) and the same profit potential. The protocol charges the same fees regardless of side.

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Symmetric Risk and Reward

Unlike some DeFi protocols that have asymmetric payoffs (e.g., options, lending liquidations), the Nile Markets forward contract is fully symmetric:
  • Maximum loss is identical for both sides: the locked margin on the position
  • Profit potential is identical for both sides: theoretically unlimited (bounded only by how far the price can move before maturity)
  • Trading fees are the same for both sides
  • Margin requirements are the same for both sides
  • Liquidation rules are the same for both sides
This symmetry makes the protocol straightforward to reason about. The only variable that matters for PnL is the direction and magnitude of the EUR/USD price move relative to your entry strike.