In any trading contract, it’s important to understand how P&L is calculated before entering one. In sequential order, traders need to understand the following variables in order to accurately calculate their P&L.
Average Entry Price of position.
In ONUS Pro, whenever traders add on to their position via new orders, Average Entry Price will change.
For more details, please visit the article: "How to calculate Average Entry Price"
Unrealized P&L
Once an order is successfully executed, an open position and its real-time unrealized P&L will be shown inside the positions tab.
Depending on which side of the trade you are in, the formula used to calculate the unrealized P&L will differ.
For Long (Buy) position:
Example
Trader A holds an existing BTCUSDT open buy position of 0.2 qty with an entry price of 70,000,000 VNDC. When the Mark Price is showing USD 75,000,000 VNDC, the unrealized P&L show will be:
Unrealized P&L = 0.2 * (75000000 – 70000000) = 1,000,000 VNDC
For Short (Sell) Position:
Example
Trader B holds an existing BTCUSDT open sell position of 0.4 qty with an entry price of 60,000,000 VNDC. When the Mark Price is showing 50,000,000 VNDC, the unrealized P&L show will be:
Unrealized P&L = 0.4 * (60000000 – 50000000) = 4,000,000 VNDC
Note
- In VNDC Margin contract, your P&L is also settled in VNDC. This is opposite to COIN.M contract where P&L is settled depending on the coin being traded (Example: BTCUSD contract is settled in BTC, ETHUSD contract is settled in ETH,…)
- When the price movement is by a certain price (example 10,000,000 VNDC) in the profitable or non-profitable direction, assuming the position size of 1 BTC, this means that a trader will gain or lose 10,000,000 VNDC respectively.
- Increasing leverage does not directly multiply the profits/losses. Instead, profits and losses are determined by the position size and price movement. To put it simply:
- The higher the leverage, the lower the margin collateral needed to open your position.
- The larger the contract quantity, the bigger the profits/losses
- The larger the price movement relative to the entry price, the bigger the profits/losses
- Last but not least, unrealized P&L does not factor in any trading or funding fees which traders may have received/paid out in the process of opening and holding the position.
ROE%
ROE% basically shows the Return On Equity similar to Unrealized P&L, the figure shows changes depending on the movement of the Mark Price. As such, the ROE% or Unrealized P&L% formula is below:
Using Trader A as an example, Trader A holds an existing BTCUSDT open buy position of 0.2 qty with an entry price of 70,000,000 VNDC. When the Mark Price is showing 75,000,000 VNDC, the unrealized P&L shown will be 1,000,000 VNDC. Assuming the leverage used is 10x.
Based on our earlier calculation, the position's unrealized P&L = 1,000,000 VNDC
Initial Margin = (Order Quantity * Entry Price) / Leverage = (0.2 * 70000000) / 10 = 1,400,000 VNDC
Fee to Close = Bankruptcy price * Order Quantity * 0.04% = 63000000 * 0.2 * 0.04% = 5040 VNDC
→ ROE% = [1000000 / (1400000 + 5040)] * 100 (%) ≈ 71.17%
Note
Some traders may have misunderstood this but adjustments to increase leverage do not increase your unrealized profits. Instead, traders will see an increase in unrealized P&L% due to a reduction in your position margin and not because of an increase in actual profits. Using Trader A as an example again, notice that regardless if leverage is 10x, 5x or 20x, the unrealized P&L remains the same:
- If Trader A uses the same 10x leverage, his unrealized P&L = 1,000,000 VNDC, unrealized P&L% = 71.17 %.
- If Trader A reduces the leverage to 5x, his unrealized P&L = 1,000,000 VNDC, unrealized P&L% = 35.58%.
- If Trader A increases the leverage to 20x his unrealized P&L = 1,000,000 VNDC, unrealized P&L% = 142.34%.
Closed P&L
When traders finally close their position, the P&L becomes realized and is recorded inside the Closed P&L tab within the Assets page. Unlike unrealized P&L, there are some major differences in the calculation. Below summarizes the differences between the unrealized P&L and closed P&L.
|
Calculation of Unrealized P&L |
Calculation of Closed P&L |
|
|
Position Profit & Loss (P&L) |
Yes |
Yes |
|
Trading Fee(s) |
No |
Yes |
|
Funding Fee(s) |
No |
Yes |
Therefore, assuming full closing of the entire position, the formula for calculating Closed P&L is as follows:
Using Trader B as an example, Trader B holds an existing BTCUSDT open sell position of 0.4 quantity with an entry price of 60,000,000 VNDC. When the Last Traded Price is showing 50,000,000 VNDC, trader B decided to close the entire position via the Close by Market function.
Assuming that Trader B also opened the position via a market order and funding fees totaling 210,000 VNDC were paid out while holding the position.
Fee to Open = Order Quantity * Entry Price * 0.04% = 96,000 VNDC paid out
Fee to Close = Order Quantity * Closing Price * 0.04% = 80,000 VNDC paid out
Sum of all funding fees paid/received = 210,000 paid out
→ Closed P&L = 4000000 - 9600 - 8000 - 210000 = 3,772,400 VNDC
Note
- The above example only applies when the entire position is opened and closed via a single order in both directions.
- For partial closing of positions, Closed P&L will prorate all fees (fee to open and funding fee(s)) according to the percentage of the position partially closed and use the pro-rated figure to compute the Closed P&L.