> For the complete documentation index, see [llms.txt](https://docs.flash.trade/flash-trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.flash.trade/flash-trade/flash-trade-protocol/perpetuals-specifications/max-profit.md).

# Max Profit

This is the **max profit cap**, and it's separate from your leverage, your liquidation price, or your collateral.

#### How it works

When you open a position, the pool locks an amount of tokens to cover both your collateral and the maximum profit it's willing to pay on the trade:

```
locked_usd = (size_usd × max_payoff_bps / 10000) + collateral_usd
```

* **First term:** the maximum the pool will pay out as profit
* **Second term:** ensures your own collateral is always fully covered

At settlement, your total payout is capped at `locked_usd`:

```
payout = min(profit + collateral, locked_usd)
```

So your maximum profit is:

```
max_profit = size_usd × max_payoff_bps / 10000
```

#### Max Profit Price

Beyond a certain price, your position stops earning more profit even if the market keeps moving in your favor. That threshold is the **max profit price**.

| Direction | Formula                                    |
| --------- | ------------------------------------------ |
| Long      | `entry_price + (max_profit / size_amount)` |
| Short     | `entry_price - (max_profit / size_amount)` |

For shorts with a 100% max payoff, the max profit price effectively reaches $0 — the asset would need to go to zero for the cap to bind.

#### Typical payoff caps

Max payoff is a per-market parameter (as of 2026-07-03; tunable): **major crypto markets — BTC, ETH, SOL — cap profit at 25% of position size**; most alt, meme, and synthetic markets cap at 50–100%; a few markets run higher on one side. The position panel shows your position's live max profit price.

#### Why this matters

The cap is most relevant for **synthetic markets** — forex, commodities, and tokenized equities — where the pool is backed by USDC rather than the native asset, protecting the pool from outsized payouts.

On major crypto markets the 25% cap binds sooner than you might expect at high leverage: a 100x BTC long hits its max profit on a 0.25% favorable move. This is also why a take-profit order cannot be placed past the max profit price.

{% hint style="info" %}
**Current max payoff settings:**

Live max profit prices for any open position are shown directly on the position panel in the trade UI.
{% endhint %}


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