Introduction to Futures Pyramiding Auto-Settlement

What is Futures Pyramiding Auto-Settlement?

Futures Pyramiding Auto-Settlement is to settle the unrealized profit and loss (PNL) of the user’s current position as realized, which can be transferred manually (under isolated margin mode) or automatically (under cross margin mode) to the available balance. This means that even without closing your position, a portion of your profits can be settled in advance, freeing up funds for new positions, increasing positions, or other purposes. This settlement occurs at 0:00, 8:00, and 16:00 (UTC) on a daily basis.

Settlement Explanation

1. Settlement Price

The settlement price is the price at which both unrealized PNL and realized PNL are calculated. In situations such as position opening, adding, and settlement, the settlement price will be adjusted accordingly. 

🔗 Learn more: What is Settlement Price >>

2. Examples:

Assume you open a position in the ETHUSDT perpetual contract. The changes in position PNL during different settlement hours are as follows (total PNL is estimated using the mark price):

Explanation:

(1) At 0:00, the time of opening a long position, the settlement price equals the entry price (2000 USDT).

(2) At 04:00, the time of adding 1 ETH to the position, the settlement price is updated to the new average entry price (2150 USDT), and unrealized PNL is +300 USDT.

(3) At 08:00, at the time of settlement, the market price increases to 2300 USDT. The system converts +300 USDT unrealized PNL into realized PNL, resets unrealized PNL to zero, and updates the settlement price to 2300 USDT.

(4) At 12:00, as the market price rises to 2600 USDT, adding another 1 ETH updates the settlement price to 2400 USDT. The new unrealized PNL is +600 USDT, while the realized PNL remains +300 USDT.

Impact of Settlement on Contract Data

1. Account Balance

The assets that the trader actually owns and the available margin in the Futures account. During settlement, the realized PNL generated by the futures transactions will be added or reduced from the account balance.

Account Balance Calculation

= Account Equity - Position Margin - Frozen Margin; OR 

= Transfer-In Amount - Transfer-Out Amount + Realized PNL - Initial Margin - Added Margin + Reduced Margin - Frozen Margin

2. Position Margin

Position Margin refers to the margin used by your current position.

Position Margin = Initial Margin + Added Margin - Reduced Margin + Unrealized PNL + Settlement PNL

Note: The settlement PNL in the position margin refers to the funds that convert the unrealized PNL into the settlement PNL during settlement, and it will be recalculated when the unrealized PNL is reset to zero.

(1) Position Margin Changes During Settlement:

• Isolated Margin Mode: The settlement PNL remains in the current position margin. Profits (if any) can be manually transferred to the available balance.
• Cross Margin Mode: If unrealized PNL exceeds the initial margin, it is automatically transferred to the available balance. Otherwise, the settlement PNL remains in the position margin.

(2) Adjusting Margin:

Isolated Mode: Your margin will not be added or reduced by the system unless you adjust it manually.

• Add Margin Manually: You can increase the margin according to your needs. The maximum margin that can be increased is the available balance in your Futures account.
• Reduce Margin Manually: The margin not used by the position and the realized PNL that has been settled will be reduced accordingly by adjusting the margin.
• Calculation for Maximum Margin Reduction: 

Max Reducible Margin = Position Margin - Initial Margin - Max (0, Unrealized PNL)

Cross Mode: Margin automatically adjusts at the settlements (0:00, 8:00, 16:00 UTC):

• Add Margin Automatically: Under Cross Margin Mode, all the available margin in the account can be used as position margin. When the initial margin falls below the maintenance margin, the margin will be automatically added to the position. When the available balance is insufficient, your position will be liquidated..
• Reduce Margin Automatically: Excess margin is automatically reduced to the initial margin level and transferred to the available balance.
• Note: You can also manually adjust the margin in Cross Margin Mode, and the operations are the same as under Isolated Margin Mode.

3. Unrealized PNL

The unrealized PNL refers to the profit and loss of the position held from the last settlement (0:00, 8:00, 16:00, UTC) to the current moment, also known as Paper profit or Paper loss, which is estimated at the Mark price.

(1) USDⓈ-Margined Contracts:

• Unrealized PNL (Long) = Position Size × (Mark Price - Settlement Price)
• Unrealized PNL (Short) = Position Size × (Settlement Price - Mark Price)

(2) Coin-Margined Contracts:

• Unrealized PNL (Long) = Position Size × Contract Face Value × (1/Settlement Price - 1/Mark Price)
• Unrealized PNL (Short) = Position Size × Contract Face Value × (1/Mark Price - 1/Settlement Price)
• Note: Unrealized PNL is the profit on open positions. At the time of settlement, 0:00, 8:00, 16:00 UTC daily, the unrealized PNL will be converted and settled as the realized PNL (settlement PNL), while the unrealized PNL will be reset for calculation for the next period.

4. Realized PNL

The realized PNL refers to the profit and loss since the opening of the position, including trading fees, funding fees, settlement PNL, and trading PNL of reducing or closing positions.

(1) Settlement PNL for USDⓈ-Margined Contracts:

• Settlement PNL (Long) = Position Size × (Current Settlement Price - Last Settlement Price)
• Settlement PNL (Short) = Position Size × (Last Settlement Price - Current Settlement Price)

(2) Settlement PNL for Coin-Margined Contracts:

• Settlement PNL (Long) = Position Size × Contract Face Value × (1/Last Settlement Price - 1/Current Settlement Price)
• Settlement PNL (Short) = Position Size × Contract Face Value × (1/Current Settlement Price - 1/Last Settlement Price)

(3) Trading PNL When Reducing or Closing a Position in USDⓈ-Margined Contracts

• Trading PNL (Long) = Position Size × (Closing Price - Settlement Price)
• Trading PNL (Short) = Position Size × (Settlement Price - Closing Price)

(4) Trading PNL When Reducing or Closing a Position in Coin-Margined Contracts

• Trading PNL (Long) = Position Size × Contract Face Value × (1/Settlement Price - 1/Closing Price)
• Trading PNL (Short) = Position Size × Contract Face Value × (1/Closing Price - 1/Settlement Price)

(5) Notes

• Isolated Margin Mode: During settlement, the settlement PNL remains in the current position margin. Profits (if any) can be manually transferred to the available balance, while the realized PNL from closing the position will be directly transferred to the available balance.
• Cross Margin Mode: During settlement, the settlement PNL remains in the current position margin. If unrealized PNL exceeds the initial margin, it is automatically transferred to the available balance. The realized PNL from closing the position will be directly transferred to the available balance.

5. Liquidation Price

The liquidation price is the price at which your current contract position will be forcibly liquidated by the system if certain conditions are met:

• For Long Positions: If the mark price falls below the liquidation price, the position will be liquidated.
• For Short Positions: If the mark price rises above the liquidation price, the position will be liquidated.

🔗 Learn More: 

How to Place Orders for USDⓈ-Margined Contracts (Web｜App) 

How to Place Orders for Coin-Margined Contracts (Web｜App)

How to Enable or Disable Pyramiding Auto-Settlement

• Web: CoinEx Navigation Bar > Futures Trading > Button of the upper-right corner of Order Zone > Pyramiding Auto-Settlement

• App: CoinEx App > Futures > Right upper corner of Order Zone (···) > Transaction Settings > Pyramiding Auto-Settlement

Notes

1. The Pyramiding Auto-Settlement is disabled by default, and the settlement price is the average opening price.

2. After opening a position, if you enable Pyramiding Auto-Settlement, the settlement will still be conducted when it's enabled. As soon as it’s disabled, the settlement price will be updated to the last settlement price when the next settlement occurs.