Decreasing Position

To start with, in some sense there is no essential difference between closing and decreasing a position. The only difference is quantitative: when you close a position, you release all the assets held in it, while decreasing means releasing a portion of the position. Now, what impact does decreasing a position have on the the most important of your position facets, such as

• margin

• net funding

• P&L ?

Lets look at the following example:

So there're 62.36 Waves you control in the position. What happens if you decide to release a fraction of the position totalling in, say, 100 USDN? Let's find out:

100 USDN roughly make about 16.8 Waves, so the decreased position will amount to 45.56 Waves. What about the P&L value then? The logic is quite straightforward: it changes proportionally to the position volume change. Because 16.8 is 27% out of the position value, the P&L will be reduced for 27% too, now totalling to 13.5, as a rounded estimate:

The difference goes to the margin, thus increasing it for, roughly 5 USDN.

And finally, seeing that the funding has been zeroed out, meaning that you don't owe it anymore, where was it covered from? Obviously, this is the margin that is to be used as a source to rebalance net funding. Indeed, your marging has been reduced for exactly the same value that constituted the funding due amount.

We have gone into some basic but still not readily obvious details of how position facets interfere when you change one of them. Hopefully, this information will be useful for you and help you make calculated decisions.