The paper trading environment of KuCoin Futures includes a Decrease Position Margin feature. By decreasing position margin, users can release unrealized PNL as well as manually increased margin of a position, thereby increasing capital utilization. In addition, users can also choose to increase position margin to optimize liquidation prices and reduce risk of liquidation.
It should be noted that any decrease in position margin should only be conducted when there is enough margin to support the position. Below is a description of how to decrease position margin as well as some things to keep in mind:
1. How to Decrease Position Margin?
For isolated positions, adjustments only need to be made in the position. This can be done in three simple steps:
Step one: Click the icon next to the figure in the Margin field under Positions.
Step two: Select Decrease in the drop-down menu and enter the amount you would like to reduce. There is the option to select the Max amount with one click, with the minimum amount being 0.01 USDT. The decreased position margin will be directly added to your available balance in your Futures account.
Please note that the amount of margin allowed to withdraw is related to the current unrealized PNL of the position:
a) When the user is profitable (unrealized PNL > 0), the user can withdraw position margin. Maximum withdrawal amount = actual position margin + unrealized PNL - (mark value/leverage).
b) When the user is not profitable (unrealized PNL < 0), margin cannot be withdrawn and the maximum withdrawal amount would be 0.
If adjustments are made to the position, when there is a loss, factors such as trading fees also need to be considered.
Step three: Click Confirm.
2. The Effects of Decreasing Position Margin
Decreasing margin will not affect the leverage of the position, but the position margin, entry price, and liquidation price will be recalculated. Please be mindful of liquidation risks. In addition, if the decreased margin includes unrealized PNL, the unrealized PNL will also be updated.
3. Other things to note:
a) Users can also decrease margin by increasing leverage, but this can only be done when there is sufficient margin. Otherwise, the leverage cannot be increased. Users can adjust the leverage in the order placement panel, as shown in the screenshot:
b) When the user reduces a position, the position margin will also be decreased accordingly.
c) If, after decreasing the position margin, the user also adjusts the leverage, the position margin and liquidation price will be recalculated based on the new leverage.
d) When decreasing margin, be sure to pay attention to changes in liquidation price to avoid unnecessary liquidations. Besides, with isolated positions, decreasing and withdrawing position margin are also supported by the app version.