How to Calculate P&L on Futures Trading?

This guide explains the core PnL (Profit and Loss) terms in BITGP futures trading: Realized Profit, Unrealized Profit, Position PnL, and their associated calculations. A single trade example will be used to simplify these concepts and provide clarity.

Key Terms of P&L

1. Unrealized PnL (Profit and Loss): The floating profit or loss for open positions, calculated based on the mark price. This value fluctuates with market conditions.

• Formula for Long Position: Unrealized PnL = (Mark Price - Entry Price) × Contract Size

• Formula for Short Position: Unrealized PnL = (Entry Price - Mark Price) × Contract Size

2. Realized PnL (Profit and Loss): The actual profit or loss from closing part or all of a position. This includes fees (such as trading and funding fees).

• Formula: Realized PnL = Profit from closing a position - Trading Fees - Funding Fees

3. Position PnL: The total profit or loss for a fully closed position. It includes closing profits, trading fees, and funding fees.

• Formula: Position PnL = Closing Profits - Opening Fees - Closing Fees - Funding Fees

4. Today’s PnL: Reflects the profit or loss over the current day, factoring in changes in assets and transfers.

• Formula: Today’s PnL = Current Assets - Assets at 12:00 AM UTC - Net Inbound Transfers

5. 7-Day PnL: Tracks profit or loss over the last 7 days using snapshots and transfers.

• Formula: 7-Day PnL = Current Assets - Assets from 7 Days Ago (12:00 AM UTC) - Net Inbound Transfers (7 Days)

6. Daily PnL: The net profit or loss of the day, calculated by subtracting initial assets, inbound transfers, and fees from closing assets.

• Formula: Daily PnL = Closing Assets of the Day - Initial Assets of the Day - Net Inbound Transfers

Example to understand PnL

You open a long position on BTC/USDT futures with an entry price of 90,000 USDT, a mark price of 95,000 USDT, and an exit price of 94,000 USDT. The contract size is 1 BTC, with a trading fee of 0.02% per trade and a funding rate of 0.1%. The funding fee is calculated as position value × funding rate and applies because the position was held through a single funding window.

1. Unrealized PnL: Unrealized PnL reflects the profit or loss based on the current mark price while the position is still open. In this example, the mark price is 95,000 USDT, and the entry price is 90,000 USDT.

• Formula: Unrealized PnL = (Mark Price - Entry Price) × Contract Size

• Unrealized PnL = (95,000 - 90,000) × 1 = 5,000 USDT

2. Realized PnL: Realized PnL includes the profit from closing a position, adjusted for funding fees and transaction fees.

• Formula: Closing Profits: Profit = (Exit Price - Entry Price) × Contract Size

• Profit = (94,000 - 90,000) × 1 = 4,000 USDT

• Formula: Opening Fee = Entry Price × 0.02%

• Opening Fee = 90,000 × 0.02% = 18 USDT

• Formula: Closing Fee = Close Price × 0.02%

• Closing Fee = 94,000 × 0.02% = 18.8 USDT

• Formula: Funding Fee = Position Value × Funding Rate

• Funding Fee = 90,000 × 0.1% = 90 USDT

• Formula: Realized PnL = Closing Profits - Opening Fees - Closing Fees - Funding Fees

• Realized PnL = 4,000 - 18 - 18.8 - 90 = 3,873.2 USDT

3. Position PnL: Position PnL consolidates the entire profit or loss over the trade lifecycle, accounting for all fees and profits after the position is closed.

• Formula: Position PnL = Closing Profits - Opening Fees - Closing Fees - Funding Fees Position PnL = 4,000 - 18 - 18.8 - 90 = 3,873.2 USDT

FAQs

1. What is the difference between realized and unrealized P&L?

Realized P&L is the profit or loss from closed positions, while unrealized P&L reflects potential profit or loss from open positions.

2. Does leverage affect P&L?

Yes, leverage amplifies both potential profits and potential losses. It doesn't directly increase profits, but it magnifies the impact of price movements on your P&L. Adjusting leverage on an open position will change the risk exposure, but it doesn't automatically boost profits.

3. How are trading fees factored into P&L?

Trading fees are deducted from your realized P&L, reducing your net profit or increasing your net loss.

4. Can P&L be negative?

Yes, negative P&L indicates a loss on your position.

5. Where can I find my P&L on BITGP?

You can check your P&L in the Positions tab for open positions and the Transaction History for closed positions.

Disclaimer

Cryptocurrencies are subject to high market risk and volatility despite high growth potential. Users are strongly advised to do their research as they invest at their own risk. Thank you for supporting BITGP!

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