What does it mean to increase a position?
The increase position function for our Borrow feature allows you to do the opposite of claiming an existing position, allowing you to quickly and easily borrow the funds you would like to remove from the P2P lending market with no additional trading needed.
This is useful not only for reinstating a prior position that was claimed accidentally but also as a way of enhancing your liquidity profile without the need to trade in or out of these positions. It will also save you the trouble of creating orders, and you only need to pay maker fees.
To better understand increase position and its use in our Borrow feature, we will start with going into details about claiming a position:
When claiming a long BTC/USDt position, your wallet gets credited the number of BTC you were long, while at the same time debiting your wallets by the USDt value of that position (quantity * base price).
Note: The value of the overall account does not change, nor does exposure to each asset which will have a long exposure and a short exposure that remains constant. The only change here is from an accounting perspective; your wallet balances have now been adjusted to reflect the position being transferred.
Using the same example as above, with increase position function, you will be able to keep your desired exposure to an asset, e.g. BTC. However, by transferring this exposure from your wallet to an open position, the wallet is now credited with USDt which is borrowed from the P2P lending market. These funds can then be used for other trading strategies or withdrawn (up to a certain %) for other purposes, such as for use on other venues.
Note: The increase position function becomes available starting from the Basic Plus verification level and above.
How to increase my position?
Step 1: Choose a trading pair
You can choose to increase a position directly from your Positions widget. This will allow you to open a new position or increase an already opened position in either a long or a short direction, depending on the positions you already have and the trading pair of choice.
Select the trading pair you want from the provided pop-up list.
Note: This list only contains the supported pairs available on Bitfinex Borrow.
Important: Only one position can be opened for a single trading pair. Therefore if you already have a position open, the system will automatically pre-select the direction for you, and an error message will appear if you try to continue in the opposite direction.
For more details, please view: Can I open multiple margin trading positions for the same pair?
Step 2: Choose a long or a short position
Having chosen the trading pair, you need to select if you wish to open a long or a short position.
Note: Some trading pairs may only be available in either a long or a short position.
A long position will be using the quote currency as collateral, while a short position would be using the base currency.
Examples (the provided calculations are only an estimation):
- In the case of BTC/USDt, for a long position, you would borrow USDt with BTC, so if you have 1 BTC and 0 USDt, clicking on Increase Position would create a long position for 1 BTC, and you would get debited 1 BTC and credited 18000 USDt (assuming the market price is 18000 USDt) on your margin wallet.
- In the case of a short position, assuming you have 18000 USDt and 0 BTC, using the increase position feature would create a 1 BTC/USDt short, and you would get debited 18000 USDt and credited 1 BTC on your margin wallet (assuming the market price is 18000 USDt).
Important: If there is an already open position, the further increase will use the same base price of the existing position. Please see the screenshot below for details and view our Bitfinex Borrow article for more information.
Step 3: Enter a position size
In the Amount field, you will need to enter the amount of the position you wish to create or increase in.
Note: The amount should be in the base currency of the trading pair.
The maximum and minimum allowed information can be found in our API documentation here: https://api.bitfinex.com/v2/conf/pub:spec:pos_increase
Step 4: Confirmation
Once you click on Proceed, your position will be created or increased. You will see it in your Positions widget on the trading page. The funds will be made available for you in your margin wallet, available for withdrawal or for trading.
For more information on interest rates, collateral and relevant fees, please view our Bitfinex Borrow article.
If you have any questions, please contact Bitfinex Support.