How to Calculate Profit and Loss for Futures Contracts

Profit and loss calculations are based on the contract’s collateral. For instance, a USDⓈ-margined contract will be denominated in USDT. Whereas, BTC Coin-margined contracts will be denominated in BTC.

Do note that unrealized Profit and Loss are calculated based on the Mark Price, while realized Profit and Loss are calculated based on the last price.

 

 

Profit and Loss calculations for USDⓈ-margined contracts (BTCUSDT)

Assume you purchase (long) 10,000 USDT worth of BTCUSDT perpetual contracts at 50,000 USDT. The price increases and you exit at 55,000 USDT. Your profit will be:

((1 / Futures Entry Price) - (1 / Futures Exit Price)) * Position Size

( 1 / 50,000 - 1 / 55,000 ) * 10,000 = 0.018182 Bitcoin

Conversion to USDT = 0.018182 * 55,000 USDT = 1,000 USDT

Assume you sold (short) 10,000 USDT worth of BTCUSDT perpetual contracts at 50,000 USDT. The price decreases and you exit at 45,000 USDT. Your profit will be:

((1 / Futures Entry Price) - (1 / Futures Exit Price)) * (Position Size * -1)

( 1 / 50,000 - 1 / 45,000 ) * -10,000 = 0.022 Bitcoin

Conversion to USDT = 0.022 * 45,000 USDT = 1,000 USDT

 

How to calculate Unrealized PNL and ROE%

USDⓈ-M Futures Contracts

• Users choose Mark price as price basis:

Unrealized PNL = position size * direction of order * (mark price - entry price)

ROE% =Unrealized PNL in USDT / entry margin = ( ( mark Price - entry Price ) * direction of order * size ) / （position_amount * contract_multiplier * mark_price* IMR）

*IMR = 1/Leverage

• Users choose Latest price as price basis:

Unrealized PNL = position size * direction of order * (latest price - entry price)

ROE% = Unrealized PNL in USDT / entry margin = ( ( latest price - entry Price ) * direction of order * size ) / （position_amount * contract_multiplier * mark_price* IMR）

direction of order: 1 for long order；-1 for short order

COIN-M Futures Contracts

• Users choose Mark price as price basis:

Unrealized PNL = position_size * contract_multiplier * direction of order * (1 / entry price - 1 / mark price)

ROE% = Unrealized PNL * mark price / abs(size) * contract_multiplier * IMR

• Users choose Latest price as price basis:

Unrealized PNL = position_size * contract_multiplier * direction of order * (1 / entry price - 1 / latest price)

ROE% = Unrealized PNL * mark_price / abs(size) * contract_multiplier * IMR