Regardless of any trades, it is important to understand how P&L is calculated before entering one. In sequential order, traders need to understand the following variables in order to accurately calculate their P&L.
1) Average Entry Price (AEP) of position
Average entry price = Total contract value in USDT/Total quantity of contracts
Total contract value in USDT = ( (Quantity1 x Price1) + (Quantity2 x Price2)...)
For example:
Bob holds an existing ETHUSDT open buy position of 0.5 qty with an entry price of USDT 2,000. After an hour, Trader A decided to increase his buying position by opening an additional 0.3 qty with an entry price of USDT 1,500.
By using the figures above:
Total contract value in USDT
= ( (Quantity1 x Price1) + (Quantity2 x Price2) )
= ( (0.5 x 2,000) + (0.3 x 1,500) )
= 1,450
Average Entry Price
= 1,450 / 0.8
= 1,812.5
2)Unrealized P&L
Once an order is successfully executed, an open position and its real-time unrealized P&L will be shown inside the positions tab. 1 refers to open long and -1 refers to open short.
Unrealized P&L = (Current Marked Price - Average Entry Price) * Direction * Contract Qty
Unrealized P&L% = ( Position's unrealized P&L / Position Margin ) x 100%
For example:
Bob holds an existing ETHUSDT open buy position of 0.8 qty with an entry price of USDT 1,812. When the Current Marked Price inside the order book shows USDT 2,300, the unrealized P&L shown will be 390.4 USDT.
Unrealized P&L = (Current Marked Price - Entry Price) * Direction* Contract Qty
= (2,300 - 1,812) x1 x 0.8
= 390.4 USDT
3) Closed P&L
When traders finally close their position, the P&L becomes realized and is recorded inside the Closed P&L tab within the Assets page. Unlike unrealized P&L, there are some major differences in calculation. Below summarizes the differences between unrealized P&L and closed P&L.
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Calculation of Unrealized P&L
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Calculation of Closed P&L
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Position Profit and Loss (P&L)
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YES
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YES
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Trading Fee(s)
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NO
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YES
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Funding Fee(s)
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NO
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YES
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Closed P&L = Position P&L - Fee to open - Fee to close - Sum of all funding fees paid/received
Closed P&L% = ( Position's closed P&L / Position Margin ) x 100%
Note:
a) The above example only applies when the entire position is opened and closed via a single order in both directions.
b) For partial closing of positions, Closed P&L will prorate all fees (fee to open and funding fee(s)) according to the percentage of the position partially closed and use the pro-rated figure to compute the Closed P&L