This article explains the Increase Position and Decrease Position transaction categories in Crypto Tax Calculator. These categories are specifically designed for auto-categorizing on-chain margin/derivatives trading, but you can also use them to categorize transactions yourself.
You'll learn:
What these categories are and when they're used
How auto-categorization works for on-chain derivatives (GMX and Uniswap)
The difference between auto-categorized and manually categorized transactions
Why manual categorization doesn't generate realized profit/loss
Important: These categories are designed for on-chain derivatives protocols. For exchange-based margin trading, see Understanding Margin Transaction Imports: Realized P&L vs. Trades.
Derivative/margin transaction categories discussed in this guide
Opening/increasing a position:
Category | Description |
Increase Position | You invest crypto from your wallet to open or increase a derivatives position |
Receive Position Token | You receive a position token representing your position (for derivatives) |
Closing/reducing a position:
Category | Description |
Decrease Position | You closed or reduced a position and received crypto returns back into your wallet (for derivatives) |
Send Position Token | You return the position token to close or reduce your position (for derivatives) |
Auto-categorized 'Increase Position' and 'Decrease Position' categories
When you import on-chain transactions using wallet/blockchain sync, Crypto Tax Calculator automatically detects derivatives contract interactions and creates grouped transactions as 'Increase Position' or 'Decrease Position'. The transaction details show as follows in the Transactions page:
Grouped transaction (Auto-categorized) | Increase Position | Decrease Position |
Transaction categories included in the breakdown view |
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Criteria to meet to be auto-categorized
The transactions are imported using blockchain/wallet syncing, AND
The transactions happened on GMX or Uniswap, AND
The app identifies derivative contract functions.
What the app does automatically:
Increase Position:
Identifies the contract function as a derivatives position increasing.
Creates the position token and calculates its value.
Groups related actions.
Decrease Position:
Identifies the contract function as a derivatives position decreasing.
Creates the position token and calculates its value.
Creates and calculates realized P&L and the fees are being counted.
Groups related actions.
🗒️ You can find your Realized Profit and Realized Loss listed in the Derivative Trading Report.
How manual categorization works
You can also manually categorize transactions using these categories for any suitable ones. However, manual categorization works differently from auto-categorization and can not create the same grouped transactions as auto-categorized ones.
What happens when manually categorizing:
Category | Treated as |
Increase Position | Sell crypto, a disposal that creates a CGT event. |
Receive Position Token | Buy the position token. An acquisition that creates a cost basis. |
Decrease Position | Buy crypto. An acquisition that creates a cost basis. |
Send Position Token | Non-taxable disposal. |
🤓Critical Difference:
Manually categorizing derivative trading using these categories does NOT automatically generate realized profit/loss or position tokens. The gains from manual categorization will be capital gains rather than realized profit/loss.
❌ Don't use manual categorization if:
You expect it to automatically calculate realized P&L (it won't)
You need the transactions to appear in your Derivative Trading Report as realized profit/loss
FAQs
Q: What about other DeFi derivative trading protocols like Hyperliquid?
The derivative transactions from Hyperliquid should be auto-categorized as Realized Profit/Loss. How derivative transactions are shown in CTC depends on how the data is provided to us. You can read more here for context.
Q: I manually categorized transactions as Increase/Decrease Position, but no realized P&L appeared in my Derivative Trading Report. Why?
Manual categorization only applies categories to transactions and is treated as buy and sell. It doesn't trigger automated profit/loss calculations.
If you need realized P&L from Decrease Position transactions in your Derivative Trading Report, it must meet the criteria here.
Q: Can I use these categories for margin trading on exchanges like Binance or Bybit?
These categories are designed specifically for on-chain derivatives like GMX and Uniswap. For exchange margin trading, see Understanding Margin Transaction Imports: Realized P&L vs. Trades
Q: Can I ungroup auto-categorized transactions?
Yes. Check this guide to learn how.