How to use Flexline to go long or short

Last updated: August 21, 2026

A Flexline loan does not, on its own, give you a long or short position on the asset you borrow. Whatever currency you borrow is the currency you must repay at maturity, regardless of how its price moves during the loan duration.

If you do have a view on where an asset’s price is heading, you can use Flexline to express it, but it takes an extra step after the loan is issued: what you do with the loan proceeds is what creates your directional exposure, not the loan itself.

To go long an asset (i.e., to benefit if its price rises), borrow a stablecoin or fiat currency through Flexline, then use the loan proceeds to buy the asset you expect to appreciate. Your loan remains due in the stablecoin or fiat you borrowed, so if the asset’s price rises, the value of your holdings increases while your repayment obligation stays fixed. If the asset’s price falls instead, you still owe the same amount of stablecoin or fiat, and you bear the loss on the asset you purchased.

Example: You expect BTC to rise in price. You borrow 50,000 USDG via Flexline and use the proceeds to buy BTC on Kraken Pro. If BTC’s price increases before the loan matures, the value of your BTC holdings rises while you still only owe 50,000 USDG at maturity, the difference is your gain. If BTC’s price falls, your BTC holdings lose value, but you still owe the full 50,000 USDG, so the loss is yours.

To short an asset (i.e., to benefit if its price falls), borrow that asset itself through Flexline, then sell it for a stablecoin or fiat currency. Your loan remains due in the original asset you borrowed, so if its price falls before the loan matures, you can buy it back for less than what you received when you sold it, repay the loan, and keep the difference. If its price rises instead, you’ll need to spend more to buy back the amount owed, and you bear that loss.

Example: You expect BTC to fall in price. You borrow 1 BTC via Flexline and immediately sell it for USD. If BTC’s price falls before the loan matures, you can buy back 1 BTC for less USD than you originally received, repay the loan, and keep the difference as your gain. If BTC’s price rises instead, buying back the 1 BTC you owe will cost you more USD than you received, and that difference is your loss.

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    Borrowing an asset and simply holding it is directionally neutral. It has no price exposure by itself, since you owe the same asset back regardless of its price.

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    Both long and short strategies carry liquidation risk. If the market moves against your position and your collateral value falls below the required margin level, some or all of your assets may be sold to cover the loan. Learn more in Collateral levels of Flexline.

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    Interest continues to accrue every 4 hours over the life of the loan in the currency you borrowed, independent of how your directional bet performs. See What are the fees for Flexline?

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    At maturity, you must repay the full amount in the original borrowed currency. If you don’t hold enough of that currency in your main wallet, other assets will be converted to cover the repayment, which may incur a conversion fee.

Using Kraken Flexline involves risk, may have tax implications, and may result in the loss of capital. Borrowed assets are subject to withdrawal limits. Availability of Kraken Flexline is subject to certain limitations and eligibility criteria.

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