In Merge Positions mode, the same contracts will be automatically merged. For example, traders goes long on 10 EOSUSD.09 contracts and sells short 5 EOSUSD.09 contracts. The position will eventually be displayed as 5 EOSUSD.09 contracts.
When the position is closed, the average cost of the position is calculated according to the moving average method, and the profits or losses of the contract are calculated using the average price after the the moving average is applied.
For example, the user opens a BTCUSD.09 contract at a price of 9500 USD, and opens another 2 BTCUSD.09 at 9800 USD. The position cost after the moving average method is applied is: 3/(1/9500+2/9800)≈9698.