What if the stock reopens lower?
A token can keep trading while its reference stock market is closed. This example shows how a price gap can eat through collateral—and why a lender might reduce the amount it is willing to lend.
Try the numbers ↓Start with the collateral.
Collateral is the asset backing a loan. A $100,000 position at a 70% loan-to-value ratio supports a $70,000 loan. The remaining $30,000 is the initial cushion.
Apply a price gap and selling cost.
In this demo, a 25% price fall leaves $75,000. Selling it at a further 5% liquidity discount produces $71,250. A loan above that amount has a shortfall in this scenario.
Adjust the model limit.
A haircut is the fraction of collateral value the model refuses to lend against. Here it increases with hours closed and the chosen stress gap. This simple teaching rule is not a calibrated lending policy.
Cash after stress = collateral × (1 − price drop) × 95%
A worked example
For $100,000 collateral and a $70,000 loan, a 25% gap leaves $71,250 after the assumed selling discount: a $1,250 cushion. A 40% gap leaves only $57,000, creating a $13,000 shortfall.