For traders, it’s an important step to know how to calculate profit and loss before placing an order. The following is a guide to help you better understand the relationship between different variables, and profit and loss calculations. Please note that all USDC Perpetual and Futures Contracts are settled in USDC. 

 

 

 

• Average Entry Price
• Unrealized P&L
• ROI
• Realized P&L

 

 

 

Average Entry Price 

The average entry price of the USDC Perpetual and Futures Contract is the weighted average price of your position during the current settlement cycle, which will be affected by the increases in position size. At the end of each settlement cycle, the Mark Price at the time of settlement will become the new average entry price.

 

Formula

Average Entry Price = Total Session Value/Total Trade Size 

Total Session Value = (Entry Price 1 × Trade Size 1) + (Entry Price 2 × Trade Size 2) …

 

Example

Trader A holds a long position of 0.5 BTC with an entry price of $50,000. Believing that the price of BTC will continue to rise, Trader A decides to increase the long position by opening another 0.8 BTC at an entry price of $51,000.

Total Session Value = (50,000 × 0.5) + (51,000 × 0.8) = 65,800 USDC

Average Entry Price = 65,800/(0.5 + 0.8) = $50,615.38

 

 

 

 

 

 

 

 

Unrealized P&L 

Unrealized P&L is the current profit or loss of open positions in the session settlement. Based on the direction of your position — long or short — the formula used to calculate the unrealized profit and loss will be different. Unrealized P&L will be refreshed every eight (8) hours at settlement time.

 
 

Long Position

Formula

Unrealized P&L = (Current Mark Price - Average Entry Price) × Position Size

 

Example

Trader B holds a long position of 0.6 BTC with an average entry price of $55,000. When the Mark Price is $58,000, the unrealized profit and loss will be (58,000 − 55,000) × 0.6 = 1,800 USDC.

 
 

 

Short Position

Formula

Unrealized P&L = (Average Entry Price - Current Mark Price) × Position Size

 

Example

Trader C holds a short position of 0.2 BTC with an average entry price of $53,000. When the Mark Price is $54,000, the unrealized profit and loss will be (53,000 − 54,000) × 0.2 = −200 USDC.

 

 

 

 

 

 

 

 

ROI

Return on investment (ROI) is an indicator used to evaluate the performance of your investment.

 

Long Position

Formula

ROI = [(Mark Price − Entry Price) × Position Size/ Initial Margin] × 100%

Initial Margin = Position Size × Entry Price/Leverage

 

Example

Revisiting Trader B’s case, who holds a long position of 0.6 BTC with an entry price of $55,000. When the Mark Price is $58,000, the unrealized profit and loss will be 1,800 USDC [(58,000 − 55,000) × 0.6].

 

Assuming that Trader B uses 10x leverage:

Initial Margin = 0.6 × 55,000/10 = 3,300 USDC

ROI = (1,800/3,300) × 100% = 54.545%

 
 

 

Short Position

Formula

ROI = [(Entry Price − Mark Price) × Position Size/ Initial Margin] × 100%

Initial Margin = Position Size × Entry Price/Leverage

 

Example

Revisiting Trader C’s case, who holds a short position of 0.2 BTC with an entry price of $53,000. When the Mark Price is $54,000, the unrealized profit and loss will be −200 USDC.

 

Assuming that Trader C uses 10x leverage:

Initial Margin = 0.2 × 53,000/10 = 1,060 USDC

ROI = (−200/1,060) × 100% = −18.868%

 

 

 

 

 

 

 

Realized P&L 

Realized P&L includes the realized P&L upon settlement, closed positions, funding fees, and trading fees. 

 

Read More

8-Hour Session Settlement Mechanism (USDC Contract)
Perpetual & Futures Contract: Fees Explained
Funding Fee Calculation

 

 

Formula 

Realized P&L =  Position P&L - Realized Trading & Funding Fees + Realized P&L at settlement

Position P&L (Long) = (Exit Price - Average Entry Price) × Position Size

Position P&L (Short) = (Average Entry Price - Exit Price) × Position Size

 

Example

 

 

To check the position P&L history, traders can visit here. Please refer to the transaction log for more details on the total realized P&L and wallet balance changes.

 

The profit and loss calculation of USDC Futures works similarly to USDC Perpetual Contracts. However, if the trader does not manually close the USDC Futures position and holds it until the contract is settled, no settlement fee will be charged.