Equity & Loss Calculation of Futures Account

Equity of Contract Account

Contract account consists of equity, deposit, RPL and UPL. Means all assets of this contract in your accounts.

Equity = Deposit + realized profits/losses + unrealized profits/losses.

Account Balance

Balance: margin of your contract account, it is also the amount transferred from your spot account. After settlement, your RPL will be added to your balance.

Unrealized Profit & Loss

The profit / loss generated by a position that has yet to be closed,which will change with the latest price.

Long side:

UPL of contract = (1/position price- 1/latest price) * Number of contracts * Contract face value

Short side

UPL of contract = (1/ latest price - 1/ position price) * Number of contracts * Contract face value

E.g. A user opened 100 long BTC positions at position price 5000 USD/BTC, and the last traded price is 8000 USD/BTC. The UPL of contract will be (1/ 5000 - 1/ 8000) * 100*100 = 0.75 BTC

Realized Profit & Loss

Profits and losses, from the last settlement till now, have been realized by closing your position. It can be used as margin for the holding positions and open orders. RPL is in fact the profit / loss generated after closing position(s).

Realized profit and loss cannot be transferred out of the contract account before clearing/delivery of the contract.

RPL of contract:

Long side:

RPL of contract = (1/position price - 1/close price) * Number of contracts * Contract face value

Short side:

RPL of contract = (1/close price - 1/position price) * Number of contracts * Contract face value

E.g. A user opened 100 long BTC positions at position price 5000 USD/BTC, and the last traded price is 4000 USD/BTC. The realized profit & loss of contracts= (1/5000-1/4000)*100*100 = -0.5BTC.

Open Price

Open price is the average cost price of opening positions and the actual cost of opening positions. It will not change along with the settlement. Positions of the same assets in the same direction will be calculated jointly.

For example: Tom buys/sells 100 conts BTC/USD quarterly contract (100 USD/contract) at the price of 10,000 USD and buys/sells another 200 conts at the price of 11,000 USD, then the open price of this position= [100 * (100 + 200)] / [ (100 * 100 / 10,000) + (100 * 200 / 11,000)] = 10,645.1 USD.

Position Price

Position price is a price used to calculate users’ unrealized PnL and the closing PnL. The price will be adjusted accordingly after each settlement or position increase, while the change of position price will not affect the user’s actual PnL. When closing a position, the cost will be calculated by using the moving average method. That is to say, the system will not distinguish the position at which open price is to be closed, instead it will use the average position price as the cost price to calculate PnL.

For example: Tom bought 100 conts BTC/USD quarterly contract (100 USD/contract) of long positions at 8:30 am (GMT+8) at the price of 10,000 USD, and bought another 200 conts at the price of 11,000 USD at 12:30 pm (GMT+8), then the open price = position price = [100 * (100 + 200)] / [(100 * 100 / 10,000) + (100 * 200 / 11,000)] = 10,645.1 USD.

  1. Before the settlement, the open price of the user’s position is equal to the position price 10,645.16 USD. Assume the settlement price at 16:00 (GMT+8) is 12,000 USD, the system will calculate the realized PnL by using the settlement price and transfer them to the account balance. Meanwhile, the position price will be adjusted to 12,000 USD after the settlement, while the open price keeps unchanged, which is at 10,645.16 USD.
  2. After the settlement, assume Tom increases another 200 conts of long positions at the price of 12,800 USD at 18:00 (GMT+8), then the open price and position price of the position are as below:
  3. a) Open price = [100 * (300 + 200)] / [ (100 * 300 / 10,645.16) + (100 * 200 / 12,800)] = 11,413.7 USD;
  4. b) Position price = [100 * (300 + 200)] / [(100 * 300 / 12,000) + (100 * 200 / 12,800)] = 12,307.6 USD;
  5. If the user closes part of this position, both the open price and the position price will not change.

PnL and PnL Ratio

PnL (Positons) refers to the profits and losses for current unclosed positions, including the realized PnL from previous settlements and the unrealized PnL from the last settlement.

PnL ratio refers to the percentage of the PnL from holding the position to the cost of opening the position, that is, PnL ratio = PnL / Initial Margin.

For instance, Tom bought 100 conts BTC/USD quarterly contract (100 USD/contract) with the 10x leverage to open a long position at the price of 10,000 USD, and the order is completely filled. When the latest price rises to 11,500 USD, the PnL and PnL Ratio are calculated as below:

PnL (Positions) = (1 / 10,000 – 1 / 11,500) * 100 * 100 = 0.1304 BTC;

PnL ratio = 0.1304 / (100 * 100 / 10,000 / 10) = 130.43%.

Closing PnL and PnL

Closing PnL represents the PnL from the latest settlement, excluding the PnL from previous settlements. If any settlement has been proceeded for your position, the system will use the average position-closing price and the positon price to calculate the closing PnL. If not, the system will use the average position-closing price and the open price to calculate the closing PnL.

PnL (Position-closing) represents the cumulative PnL of the closed position from position opening to position closing, including the settled PnL of the position. It’s calculated by using the position-closing price and the open price.

Example 1: Tom bought 100 conts BTC/USD quarterly contract of long positions at the price of 10,000 USD at 8:30 am (GMT+8) and closed the position at the price of 11,000 USD at 13:00 pm, then the closing PnL = PnL (Position-closing) = (1 / 10,000 – 1 / 11,000) * 100 * 100 = 0.0909 BTC;

Example 2: Tom bought 100 conts BTC/USD quarterly contract of long positions at the price of 10,000 USD at 8:30 am (GMT+8), and closed this position at the price of 13,000 USD at 17:00, while the system has proceeded a settlement for this position at 16:00 with the settlement price 12,000 USD:

  1. At 16:00, the system has proceeded a settlement for this position and transferred the unrealized PnL (the PnL between the open price 10,000 USD to the settlement price 12,000 USD) to the realized PnL, then transferred to the account balance. The position price has been adjusted to 12,000 USD after the settlement. Therefore, the closing PnL refers to the PnL from the last settlement to the position closing, that is, the closing PnL = (1 / 12,000 – 1 / 13,000) * 100 * 100 = 0.0641 BTC;
  2. PnL (Position-closing) represents the cumulative PnL of the closed position from position opening to position closing, including the settled PnL of the position. It is also the actual PnL from position opening to positon closing. The open price of the position is 10,000 USD, and the position-closing price is 13,000 USD, then the PnL (positon-closing) = (1 / 10,000 – 1 / 13,000) * 100 * 100 = 0.2307 BTC.

In conclusion, the closing PnL and the PnL displayed on the front end will not affect the actual PnL of users’ position.