To facilitate users’ better understanding and usage of the futures products, this article will explain each variable involved in the futures profit and loss calculation.
1.Average Opening Price
When users increase their positions in the USDT perpetual futures, the average opening price changes. The formula is as follows:
Average Opening Price = Total futures value in USDT / Total futures quantity
Total futures value in USDT = [(Quantity of futures 1 x Price 1) + (Quantity of futures 2 x Price 2) …]
For example, if a user currently holds a long position of 0.5 BTC/USDT with an opening price of 30,000 USDT and decides to increase the position by another 0.3 BTC an hour later with an opening price of 31,000 USDT:
Total futures value in USDT: [(0.5 x 30,000) + (0.3 x 31,000)] = 24,300
Total futures quantity: 0.5 + 0.3 = 0.8 BTC
Average opening price: 24,300 / 0.8 = 30,375
2.Unrealized Profit and Loss
After the order is executed, users can view the real-time changes in unrealized profit and loss in the position. It is important to note that unrealized profit and loss do not include any transaction fees or funding costs incurred during the opening/closing/holding process. The calculation formulas are as follows:
Long Position:
Unrealized Profit and Loss = Futures Quantity x (Mark Price – Opening Price)
Short Position:
Unrealized Profit and Loss = Futures Quantity x (Opening Price – Mark Price)
The position profit and loss is determined by the futures quantity and price fluctuation, regardless of the leverage. The larger the futures quantity and the larger the price difference between the opening price and the mark price, the higher the profit or loss.
3.Return on Investment (ROI)
The ROI shows the return on investment in the position, which changes in real-time with price fluctuations. The percentage is calculated based on unrealized profit and loss, as follows:
ROI (%) = (Unrealized Profit and Loss / Initial Margin) x 100%
Initial Margin = (Futures Quantity x Opening Price) / Leverage
*In full position mode, the initial margin is calculated based on the maximum leverage allowed by the current risk limit for that currency, such as up to 125x for BTC/USDT.
It is important to note that changes in leverage affect the initial margin, which in turn affects the ROI, but have no impact on unrealized profit and loss.
4.Realized Profit and Loss
After closing the position, unrealized profit and loss are converted into realized profit and loss. Users can view this in “Closed Positions” and “Closed Position Details.” The calculation methods for realized profit and loss vary on different pages.
In “Transaction History,” the realized profit and loss is calculated as follows:
Realized Profit and Loss = Quantity in Position x (Average Closing Price – Average Opening Price)
Realized profit and loss displayed in the position history:
Realized Profit and Loss = Position Profit and Loss – Opening Fee – Closing Fee – Funding Fee Paid During Holding Period
Please note that funding fees are only charged when holding the position at the time of fee collection. If there is no position held at the time of fee collection, the funding fee is not required.
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