Understanding how to accurately calculate profit and loss (PnL) is essential for anyone trading expiry futures contracts. These calculations differ based on the type of margin used—whether it's coin-margined or U-stablecoin-margined contracts—and the trading mode, such as One-way or Hedge. This guide provides a clear breakdown of the key formulas, practical examples, and answers to common questions to help you master PnL calculation.
Core Concepts and Definitions
Before diving into the formulas, it's important to understand the basic terms that form the foundation of all PnL calculations.
- Size: This refers to the number of contracts you hold in a position. In One-way mode, a long position size is a positive number, while a short is negative. In Hedge mode, both long and short position sizes are recorded as positive numbers.
- Entry Price: Your average entry price changes if you add to your position or open a reverse position. It is also replaced by the settlement price upon settlement. The formulas below always use the absolute value of size.
Essential PnL Formulas
The following formulas are used to calculate various states of your profit and loss.
Calculating Entry Price
Your average entry price is recalculated whenever you increase your position size.
- For Coin-Margined Contracts:
Entry Price = (Current Size + Added Size) / (Current Size / Entry Price + Added Size / Added Size's Entry Price) - For U-Stablecoin-Margined Contracts:
Entry Price = (Current Size x Entry Price + Added Size x Added Size's Entry Price) / (Current Size + Added Size)
Calculating Floating PnL
This is your unrealized profit or loss based on the current Mark Price.
Coin-Margined Contracts:
- Long PnL = Face Value x |Size| x Multiplier x (1／Entry Price - 1／Mark Price)
- Short PnL = Face Value x |Size| x Multiplier x (1／Mark Price - 1／Entry Price)
U-Stablecoin-Margined Contracts:
- Long PnL = Face Value x |Size| x Multiplier x (Mark Price - Entry Price)
- Short PnL = Face Value x |Size| x Multiplier x (Entry Price - Mark Price)
Calculating Floating PnL Ratio
This percentage shows your unrealized gain or loss relative to your margin.Floating PnL Ratio = (Floating PnL / Position's Margin) x 100%
Calculating Closed PnL
This is the realized PnL from partially or fully closing a position at a specific close price.
Coin-Margined Contracts:
- Long PnL = Face Value x |Size| x Multiplier x (1／Entry Price - 1／Close Price)
- Short PnL = Face Value x |Size| x Multiplier x (1／Close Price - 1／Entry Price)
U-Stablecoin-Margined Contracts:
- Long PnL = Face Value x |Size| x Multiplier x (Close Price - Entry Price)
- Short PnL = Face Value x |Size| x Multiplier x (Entry Price - Close Price)
Calculating Settlement PnL
Upon contract expiry, your final PnL is calculated using the settlement price.
Coin-Margined Contracts:
- Long PnL = Face Value x |Size| x Multiplier x (1／Entry Price - 1／Settlement Price)
- Short PnL = Face Value x |Size| x Multiplier x (1／Settlement Price - 1／Entry Price)
U-Stablecoin-Margined Contracts:
- Long PnL = Face Value x |Size| x Multiplier x (Settlement Price - Entry Price)
- Short PnL = Face Value x |Size| x Multiplier x (Entry Price - Settlement Price)
Calculating Realized PnL
This is your total realized profit or loss, which includes all fees.Realized PnL = Closed PnL + Settlement PnL + Trading Fee
Calculating Realized PnL Ratio
This metric expresses your realized gain or loss as a percentage of the margin used for the closed position.Realized PnL Ratio = (Realized PnL / Closed Position's Margin) x 100%
Practical Calculation Examples
Let's apply these formulas to real-world trading scenarios to see how they work.
Example 1: Calculating a New Entry Price
U-Stablecoin-Margined Scenario:
You hold a long BTC-USDT position of 10 contracts with an entry price of 100,000 USDT. You then add 5 more contracts at a fill price of 160,000 USDT.New Entry Price = (10 x 100,000 + 5 x 160,000) / (10 + 5) = 1,800,000 / 15 = 120,000 USDT
Coin-Margined Scenario:
You hold a short BTC-USD position of 10 contracts with an entry price of 100,000 USD. You add 5 more short contracts at a fill price of 80,000 USD.New Entry Price = (10 + 5) / (10/100,000 + 5/80,000) = 15 / (0.0001 + 0.0000625) = 15 / 0.0001625 ≈ 92,307.69 USD
Example 2: Calculating Floating PnL
U-Stablecoin-Margined Scenario:
You are long 10 BTC-USDT contracts. Face value is 0.01 BTC, multiplier is 1, entry price is 100,000 USDT, and mark price is 160,000 USDT.Long PnL = 0.01 x 10 x 1 x (160,000 - 100,000) = 0.1 x 60,000 = 6,000 USDT
Coin-Margined Scenario:
You are short 1,000 BTC-USD contracts. Face value is 100 USD, multiplier is 1, entry price is 100,000 USD, mark price is 80,000 USD.Short PnL = 100 x 1000 x 1 x (1/80,000 - 1/100,000) = 100,000 x (0.0000125 - 0.00001) = 100,000 x 0.0000025 = 0.25 BTC
Example 3: Calculating Floating PnL Ratio
U-Stablecoin-Margined Scenario:
Your position has a floating PnL of 6,000 USDT and you've posted a margin of 1,600 USDT.Floating PnL Ratio = (6,000 / 1,600) x 100% = 375%
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Frequently Asked Questions
What is the difference between floating PnL and realized PnL?
Floating PnL represents your current unrealized profit or loss based on the mark price—it changes with the market. Realized PnL is the actual profit or loss you have locked in by closing a position or through settlement, and it includes trading fees.
Why does my average entry price change when I add to a position?
Adding to a position at a different price changes the overall average cost basis for your entire holding. The system recalculates a new volume-weighted average price that reflects your total investment in the position.
How does settlement affect my PnL?
At expiry, all open positions are settled. The settlement price becomes the new reference point, and any floating PnL is converted into realized PnL. Your entry price for that contract is effectively reset.
What is the contract multiplier?
The multiplier is a value that scales the contract's face value. A multiplier of 1 means the face value is as stated. A different multiplier will directly amplify the value of each contract and the resulting PnL calculations.
Is PnL calculated differently in Hedge mode?
The core PnL formulas for individual long and short positions remain the same. The key difference in Hedge mode is that the sizes for long and short positions are managed separately and are both positive numbers, allowing you to calculate PnL for each leg independently.
Where can I see my trading fees for realized PnL?
Trading fees are typically disclosed on your exchange's fee schedule and are also itemized on your trade confirmation receipts and account history. These fees must be factored in to calculate your true realized PnL accurately.
This document is for informational purposes only and is not intended to provide investment, tax, or legal advice. Digital asset trading involves a high degree of risk, including the risk of losing your entire investment. Leveraged trading magnifies these risks significantly. Past performance is not indicative of future results. You should carefully consider your financial situation and risk tolerance before trading digital assets.