Position Management
Position Lifecycle
Positions display comprehensive metrics including notional size, net value incorporating unrealized PnL after fees, entry price, current mark price, liquidation price, and any active TP/SL trigger prices. Net value calculates as collateral plus net unrealized PnL minus accrued fees, providing real-time position valuation.
The platform supports flexible position adjustments throughout the lifecycle. Traders can increase positions by opening additional orders in the same direction, causing entry prices to recalculate as weighted averages and leverage to adjust based on new collateral-to-size ratios. Existing TP/SL orders automatically checks for validity of existing parameters.
Position Reduction
Reducing positions provides two distinct modes to accommodate different trading strategies. The default mode - Keep Leverage Off - reduces position size while maintaining collateral, effectively deleveraging the position. This approach locks collateral in place and returns only realized PnL to the trader's wallet, allowing profit-taking while maintaining exposure at lower leverage.
The alternative mode - Keep Leverage On - reduces both position size and collateral proportionally, maintaining the same leverage ratio. This mode returns both realized PnL and proportional collateral to the trader, similar to traditional perpetual platforms. The calculation for received funds accounts for fees and realized PnL, with any shortfall deducting from remaining position collateral.
Collateral Adjustment
Traders can modify position margin without changing size through collateral editing. Adding collateral improves liquidation price, increases leverage headroom, and widens the valid price boundaries for TP/SL orders. Removing collateral moves liquidation price closer to mark price and may invalidate existing TP/SL orders if they fall outside the valid boundaries.
When collateral removal narrows TP/SL caps, take profit orders beyond the new maximum update automatically to the new cap price. Stop loss orders that fall outside the new -80% boundary are marked invalid with visual warnings, requiring traders to either restore collateral or modify the orders to valid levels. The system prevents collateral removal that would leave positions below the 10 USDT minimum or exceed maximum leverage limits.
When placing orders in a selected market, the following parameters are set:
Side: Open Long; Open Short; Close Long; Close Short; Increase Long; Increase Short; Decrease Long; Decrease Short
Order Type: Market/Limit/Trigger/Liquidated
Collateral Asset & Amount: Collaterals are in USDT, limited at a 10 USDT minimum, and can be adjusted real time when managing positions.
Exposure & Leverage: Leverage can be set between 1.1x and 1000x. Position size is calculated automatically from the leverage set and collateral amount.
Slippage: All market and swap orders are executed against Hertzflow Liquidity Pools (HzLP). Slippage tolerance can be set per trade — orders that breach this tolerance will revert to protect the trader.
Entry Price: Market price for market orders, a limit price set by traders for limit orders. Meanwhile, liquidation price is estimated and updated automatically.
Exit Price: For tigger orders, exit price can be set to stop loss or take profit. For market orders, exit price is the executed price at which positions are closed.
Positions may be settled via market or TP/SL order:
Market: Trader manually initiates a full or partial settlement for market positions.
TP/SL: Settles automatically at mark price only if mark price reaches or betters limit price.
When a non-liquidated close is executed:
Positive PnL: Trader receives their initial collateral plus realized trading profit, transferred directly from the liquidity pool.
Negative PnL: Trader receives remaining collateral after losses, with the loss amount retained by the protocol’s liquidity pool.
Partial Close: Proportional PnL is realized based on the closed portion of the position.
Fee Structure
Trading Fees
Open Fee - Charged when opening positions (varies by market)
Close Fee - Charged when closing positions (varies by market)
Price Impact - Dynamic fee based on pool imbalance (can be positive or negative)
Holding Fees (per hour)
Funding Fee - Paid between long and short traders based on market skew.
Borrow Fee - Paid to liquidity providers for borrowed liquidity
Net Funding Rate - The 1-hour net rate combines funding and borrow fees into a single annualized percentage. Hover over the net rate in Market Info to view:
8-hour rate - Projected rate over 8 hours
24-hour rate - Projected daily rate
365-day rate - Projected annual rate (APR)
Hourly breakdown - Separate funding fee and borrow fee components
Price Impact
Price impact reflects the cost of pool imbalance when your trade skews the long/short ratio:
Opening positions - Entry price equals oracle mark price (no immediate impact)
During position - Price impact accrues as OI imbalance changes (not charged immediately)
Closing positions - Net price impact from open to close settles at execution
Impact cap - Maximum 50 basis points (0.5%) with excess converting to rebates
Positive impact - You may receive rebates if closing reduces pool imbalance
Slippage Tolerance
Market orders incorporate configurable slippage tolerance to accommodate price movement during execution. The acceptable price boundary for market orders combines mark price, price impact, and slippage tolerance: Mark Price × (1 ± Price Impact) × (1 ± Slippage). Limit orders use only price impact without slippage: Limit Price × (1 ± Price Impact). Take profit and stop loss orders execute at trigger prices with no slippage component, relying on guaranteed execution mechanisms.
Higher slippage tolerance increases execution probability during volatility at the cost of allowing larger price deviations from the expected price. The default 0.5% tolerance balances execution certainty with price precision for most market conditions.
Liquidation Mechanics
Leverage Limits
Maximum leverage varies by asset class:
Forex (FX)
1000x
ETH/BNB/SOL
500x
Altcoins
50x
Commodities
50x
Equities & Indices
25x
Leverage is calculated as: Leverage = Position Size / Collateral
Liquidation
Positions liquidate automatically when mark price reaches your liquidation price, preventing negative account balances.
Liquidation Price Formula:
Long positions:
Short positions:
Where Fees includes close fee, borrow fee, funding fee, price impact, and liquidation fee.
Liquidation Process:
Position automatically closes at market price
Remaining collateral (if any) returns to your wallet
Liquidation fee (0.5% - 1% of position size) is charged
Any active TP/SL orders on the liquidated position cancel
Monitor your liquidation price closely, especially during high volatility.
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