> For the complete documentation index, see [llms.txt](https://docs.pearprotocol.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.pearprotocol.io/api-integration/important-terms/synthetic-position.md).

# Synthetic Position

Pear Protocol constructs **synthetic positions** on top of raw Hyperliquid positions. Each basket trade gets its own position with independent sizing, entry prices, PnL, and TP/SL — even when the underlying Hyperliquid account holds a single aggregated position per asset.

#### Synthetic Positions vs Hyperliquid Positions

Hyperliquid tracks one position per asset per account. Pear splits that into baskets.

**Example: One Underlying, Three Baskets**

| Trade   | Long | Short | BTC Size |
| ------- | ---- | ----- | -------- |
| Trade 1 | BTC  | ETH   | 0.5      |
| Trade 2 | BTC  | ALT   | 0.3      |
| Trade 3 | BTC  | STOCK | 0.2      |

**Hyperliquid sees**: 1.0 BTC long (single position, no basket concept)

**Pear sees**: 3 independent positions, each with own entry price, PnL, and TP/SL

Users can track performance per basket, set risk per basket, and close baskets independently.

#### How Fills Become Positions

After execution on Hyperliquid, each fill is processed against existing open positions: first closing exact-match inverse positions, then any partial matches, then merging into same-structure positions or creating new ones. Entry prices use weighted averages on merge.

#### Execution Flag (`pear_execution_flag`)

Every position carries a flag indicating where its fills originated:

| Flag             | Meaning                                                                       |
| ---------------- | ----------------------------------------------------------------------------- |
| `FULLY_PEAR`     | All fills came from Pear orders                                               |
| `FULLY_EXTERNAL` | All fills came from outside Pear (direct Hyperliquid trades, other frontends) |
| `PARTIAL`        | Mix of Pear and external fills touched this position                          |

#### PnL Discrepancy: Pear vs Hyperliquid

Pear calculates PnL at the **basket level**. Hyperliquid calculates at the **asset level**. Different entry price tracking → different displayed PnL until all related positions close.

**Pear**: each basket maintains its own entry price per asset.

```
pnl = direction × (exit_price − basket_entry_price) × size − fees
```

**Hyperliquid**: global weighted average entry across all trades of same asset. Any close uses this global average.

**Example**

User opens same asset long in four baskets:

| Pair            | Entry Price |
| --------------- | ----------- |
| ASSET / SHORT-A | 33.500      |
| ASSET / SHORT-B | 33.700      |
| ASSET / SHORT-C | 33.879      |
| ASSET / SHORT-D | 33.880      |

Hyperliquid global average entry: **33.74**

User closes only ASSET / SHORT-C at **34.298**:

|                 | Entry Used               | PnL per Unit |
| --------------- | ------------------------ | ------------ |
| **Pear**        | 33.879 (basket-specific) | **+0.419**   |
| **Hyperliquid** | 33.74 (global average)   | **+0.558**   |

Neither is wrong — total PnL converges once all positions sharing that asset are fully closed.