# Bid

For an NFT collection, the current supplied NFTs might not have a satisfactory term (e.g. required margin too high, interest rate too high). Or sometimes the collection might not have a supplied NFT at all. In cases like these, the trader can bid on-chain for the desired terms first.

To bid on a collection, a trader provides three parameters on-chain:

1. **Interest Rate**: The linear rate in APY to accrue for the opened position.
2. **Limit Sell Price**: This is the lowest allowed price to sell the supplied NFT to the market. Traders can think of this term as the lowest price expected to have room for price drop profit opportunity.
3. **Margin**: This is an ETH amount that the traders need to pay upfront when placing the bid. This term is the "max collateral" of this position (details below).

Recall from the position [composition](/mechanism/trade.md#short-perpetual-position), we have

> Margin Upfront + Limit Sell Price = Collateral.

Here, the collateral and interest rate are for the supplier to agree on. On Particle frontend, any supplier can accept the terms and sell an NFT directly to the market (in one transaction). The actual sell price of the NFT is at least above the specified limit selling price. 

At the bid acceptance, the actual sell price can be higher than the limit sell price, resulting in a margin surplus. In the same transaction of bid acceptance, this margin surplus is returned to the bidder's account balance:

> Returned Margin Surplus = Actual Sell Price - Limit Sell Price.

The figure below describes how a placed bid is accepted into an opened position, and how the margin surplus is returned to the trader.

<figure><img src="/files/hGNjJ7A9iBsTrdFUdKrN" alt=""><figcaption><p>Supplier accepts a bid placed by a trader</p></figcaption></figure>


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