Whenever you buy or sell shares you have to cover your potential losses. Tradesports does this by freezing the maximum amount you can lose whenever you make a trade. These frozen funds cannot then be used to fund other trades. If you don't have enough available cash in your account to cover this potential loss, then you can't make the trade.

For example...

Let's say you buy 10 shares at a price of $6.00. The maximum amount you can lose per share is $6.00 (if the market settles at $0.00), so your total potential loss is $60.00 (10 shares x $6.00). When you buy these shares $60.00 is frozen in your account to over your potential loss and to prevent you using the same funds to cover other trades. If you don't have $60.00 in your account, you can't buy those shares.

By doing this your potential losses are always covered, which means the profits of those who you have traded with are always assured. There is no way you can default on your losses because we freeze the money required to cover your loss when you make the trade. And if you can't cover your loss then you can make the trade in the first place.

If you win the funds frozen to cover your potential loss are unfrozen and any profits made from your winning position are credited to your account. If you lose, the frozen funds are debited from your account balance as a loss.