The essence of the variability you’re noticing in position size lies in the unique structure of collateral-is-base markets and the dynamics of fees (for example, funding fees). It was clarified that the position size represents your total exposure to the price movement. For instance, if you open a position with a certain amount of BTC as collateral and a USD notional size, your total exposure equates to holding the equivalent BTC amount.
However, it was further detailed that the position size in terms of the collateral asset (e.g., ATOM for ATOM_USD market) remains constant against price movements, assuming no fees are applied over time. This constancy is due to the intricacies of how collateral and notional size in collateral adjust with price movements—each changes in a way that their effects on position size offset each other, maintaining a constant position size in the collateral asset.
The notable exception to this constancy is the impact of fees. If fees are applied, they’re distributed in the collateral asset, affecting your exposure to the price of that asset and, consequently, your position size. This is because the fees alter the amount of collateral, directly impacting your total exposure.
In summary, the perceived changes in your position size are primarily due to the application of fees, not price movements themselves. The position size, shown in terms of the collateral asset on our platform, remains constant with price movements if there are no fees involved. The fluctuation you observe is attributed to the dynamic nature of fees and their influence on your collateral, thus adjusting your total exposure or position size in the market.
This nuanced mechanism is part of the designed functionality to maintain accurate representation of exposure in our collateral-is-base markets. It acknowledges the complexity behind these calculations, ensuring that your position size remains consistent in the absence of fee adjustments, thereby minimizing confusion and maintaining clarity on your actual market exposure.