Gate.io Blog How to Calculate ROI & Possible Causes of Contract Order Failure

How to Calculate ROI & Possible Causes of Contract Order Failure

18 November 17:30

Q : let's continue studying Perpetual Contract.

A : Yes, today's topic is Possible Causes of Contract Order Failure & How to Calculate ROI.

Q : Can you tell me what the possible causes of Contract Order Failure are?

A : Some contract users may encounter failure when trying to open or close a position. The following causes are usually responsible for the failure of placing an order:

Opening a position:

1.Check if there is sufficient balance in your contract account, if there isn't, you will be notified "Transfer fund first". This can be solved by reducing the number of positions, increasing leverage or transferring funds.

2.The contract dictates the number of entries in the order book to be between 1 and 1,000,000, and the amount of currency to be in the corresponding range.

3."Reduce Only" is selected under "Conditional Order" when there is no positions left. Failure occurs to avoid scaling in.

4.Stop price exceeds the maximum tolerable deviation ratio of the set stop price.

5.When the Liquidation Price exceeds the newest Mark Price. Liquidation will be triggered right after the position is opened.

Closing a position:

1.No margin is needed for closing a position. However, margin is required when you have a "close on trigger" order and want to submit another "Take-Profit Stop-Loss" order or another "close on trigger" order. When there is no sufficient balance left in the account to cover the margin, failure to place an order will occur.

2.In the scenario described in the previous point, if a "close on trigger" order is filled, the position is then closed. The other closing order ("Take-Profit Stop-Loss" or other), due to its "Reduce Only" setting, is going to fail to avoid scaling in.

3.Stop price exceeds bankruptcy price.

A : That's all for the Possible Causes of Contract Order Failure.

Q : How to Calculate ROI

Return on Investment (ROI) refers to a ratio that compares the PNL of a position from a contract investment relative to its cost, in other words, a ratio that suggests an investment's profitability. ROI is one of the key metrics in evaluating the potential return from an investment.

ROI produces an approximate measure of the profitability of a given contract investment based on the calculated results, which can help investors evaluate their investment, learn more about their profits and losses, and optimize asset allocation.

ROI Calculation Formula:

ROI = Unrealized PNL/Margin*100%

Note: In Cross Margin Mode, the margin is the entire available balance in the trader's contract account. But when calculating ROI, use the minimum margin displayed on the webpage. Use the actual margin in the calculation when in Isolated Margin Mode.

Example:

As the screenshot above shows, the unrealized PNL of this position is 1USDT and the margin is 99.43USDT.

Therefore, the ROI of this position is:

ROI = Unrealized PNL/Margin*100%

ROI =1/99.43*100%

ROI ≈ 1%

A : Let's go to a question session

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