Equity and PNL calculation for perpetual contract accounts

Account Equity

The USDT based perpetual account equity is the total equity of the crypto in the USDT based perpetual account. The account equity of each symbol contract is calculated independently and does not affect each other. The calculation are as follows.

  • Isolated margin account equity = account balance + realized PNL for the period + unrealized PNL for the period
  • Cross margin account equity = account balance + realized PNL for all contracts for the period + unrealized PNL for all contracts for the period

Account Balance

The account balance is the amount of coin held in the user’s USDT based contracts account, including the amount of coin transferred in and out from the USDT based contracts account. Upon liquidation, the realized PNL resulting from the user’s tradings will be added to or subtracted from this balance.

Floating PNL (Unrealized PNL)

Unrealized PNL is the profit or loss of the position currently held by the user in USDT based Perpetual Contract of the symbol, and the unrealized PNL will change with the latest trading price.

  • Unrealized PNL on long position = (latest trading price – average price of position) * conts of long position contracts * each contract value
  • Unrealized PNL on short positions = (average price of positions – last trading price) * conts of short position contracts * each contract value

Example: If a user has 100 conts long positions in BTC/USDT contracts (each contract value is 0.001 BTC) and the average price of the positions is 5,000 USDT. If the latest trading price is 8,000 USDT/BTC, the existing unrealized PNL = (8,000 – 5,000) * 0.001 * 100 = 300 USDT.

Realized PNL

Realized PNL is the sum of the profit and loss incurred by the user when closing a position, including the commission fee due to the trade, and the funding fees collect or paid from the period. Realized PNL cannot be transferred out from the USDT based Contracts account before the position close.

  • Realized PNL on long positions = (average price of closed positions – average price of open positions) * number of closed long contracts * each contract value
  • Realized PNL on short positions = (average price of open positions – average price of closed positions) * number of open short positions * each contract value

Example: If the user holds 100 conts long positions in BTC/USDT contracts (contract value 0.001 BTC), the average price of the position is 5,000 USDT. If the closing price is 4,000 USDT/BTC, the long position has realized PNL = (4,000 – 5,000) * 0.001 * 100 = -100 USDT. And the commission paid for closing the position (0.04% of the taker commission) = 100 * 0.001 * 5,000 * 0.04% = 0.2 USDT. At this point, the PNL on closing position and the trading commission will be combined into the realized PNL calculation.

Average open price

The average open price means the average cost price and the actual cost of opening a position for the user. This price will not change when settlement. Positions of the same symbol and the same direction will be combined and calculated.

For example: if a user opens 100 conts BTC/USDT contracts at 10,000 USDT and 200 conts BTC/USDT contracts at 11,000 USDT, the average open price of the user position = ( 100 * 10,000 + 200 * 11,000 ) / ( 100 + 200 ) = 10666.66 USDT.

Position profits and ROE%

The Position profit is the earning of the current open position, including the settled profit of the position and the unrealized PNL incurred after the latest settlement position.

The ROE is the percentage of the user’s profit on the position held against the cost of opening the position, i.e. ROE% = profits / required margin when open position

For example, if a user opens 100 conts long positions in the BTC/USDT perpetual contract at 10,000 USDT using a multiple of 10x successfully, when the latest price of the contract rises to 11,500 USDT.

Profits of open position = ( 11,500 – 10,000 ) * 100 * 0.001 = 150 USDT

ROE% = 150 / ( 0.001 * 100 * 10,000 / 10 ) = 150%

Risk Warning:

Cryptocurrency investment is innovative blockchain products, and subject to price fluctuation. Please judge your risk-taking ability rationally and make your investments with caution.

BitWell is not responsible for any direct, indirect or consequential losses as a result of the cryptocurrency trading and holding.

BitWell Team

BitWell is committed to building a fair and transparent global digital asset trading platform, providing investors with secure, convenient and intelligent blockchain derivatives trading services.

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