Key Terms and Formulas
Calculating profit and loss (PnL) for expiry futures contracts involves several key metrics. Below is a breakdown of the essential terms and their formulas:
| Term | Formula | ||||
|---|---|---|---|---|---|
| Size | Number of contracts held. Long positions are positive; short positions are negative (One-way mode). Hedge mode treats both as positive. | ||||
| Entry Price | Adjusted when adding positions or reverse-opening. Coin-margined: (Current Size + Added Size) / (Current Size / Entry Price + Added Size / New Entry Price). U-stablecoin-margined: (Current Size × Entry Price + Added Size × New Entry Price) / (Current Size + Added Size). | ||||
| Floating PnL | Coin-margined Long: `Face Value × \ | Size\ | × Multiplier × (1/Entry Price - 1/Mark Price). **Short:** Reverse numerator. **U-stablecoin-margined Long:** Face Value × \ | Size\ | × Multiplier × (Mark Price - Entry Price)`. |
| Floating PnL Ratio | (Floating PnL / Position Margin) × 100%. | ||||
| Closed PnL | Similar to Floating PnL but uses Close Price instead of Mark Price. | ||||
| Settlement PnL | Uses Settlement Price instead of Mark/Close Price. | ||||
| Realized PnL | Closed PnL + Settlement PnL + Trading Fees. | ||||
| Realized PnL Ratio | (Realized PnL / Closed Position Margin) × 100%. |
Practical Examples
1. Calculating Entry Price
U-stablecoin-margined Contract:
- Initial: 10 contracts at 100,000 USDT.
- Added: 5 contracts at 160,000 USDT.
- New Entry Price:
= (10 × 100,000 + 5 × 160,000) / (10 + 5) = 120,000 USDT.
Coin-margined Contract:
- Initial: 10 contracts at 100,000 USD.
- Added: 5 contracts at 80,000 USD.
- New Entry Price:
= (10 + 5) / (10/100,000 + 5/80,000) ≈ 92,307 USD.
2. Floating PnL Calculation
U-stablecoin-margined Long Position:
- Face Value: 0.01 BTC, Size: 10 contracts, Entry: 100,000 USDT, Mark: 160,000 USDT.
- PnL:
0.01 × 10 × 1 × (160,000 - 100,000) = 6,000 USDT.
Coin-margined Short Position:
- Face Value: 100 USD, Size: 1,000 contracts, Entry: 100,000 USD, Mark: 80,000 USD.
- PnL:
100 × 1,000 × 1 × (1/80,000 - 1/100,000) ≈ 0.25 BTC.
3. Floating PnL Ratio
- Floating PnL: 6,000 USDT, Margin: 1,600 USDT.
- Ratio:
(6,000 / 1,600) × 100% = 375%.
FAQs
Q1: How is entry price adjusted for added positions?
A: For U-stablecoin contracts, it’s a weighted average of the existing and new entry prices. For coin-margined, it’s the harmonic mean.
Q2: What’s the difference between Floating and Realized PnL?
A: Floating PnL reflects unrealized gains/losses based on the mark price, while Realized PnL includes closed positions, settlements, and fees.
Q3: Why does PnL calculation differ for coin-margined contracts?
A: Coin-margined contracts use inverse pricing (1/price) because the collateral is in crypto, not stablecoins.
👉 Master futures trading strategies to optimize your PnL.
Risk Disclosure
Trading futures involves high risk, including potential total loss. Leverage magnifies gains and losses. Past performance ≠ future results.
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