Instructions of PNL Calculation & Contract Order Cost

20 November 10:40

Q : Good morning, let's continue studying Perpetual Contract.

A : Yes, today's topic is Instructions of PNL Calculation and Instructions of Contract Order Cost

Q : Let's start with PNL Calculation first.

A : The perpetual contract provided by Gate.io is a kind of financial derivative suitable for cryptocurrency, which currently supports both BTC and USDT for contract settlement.

The characteristic of which is that it can operate bullish and bearish to monetize according to the movement of the market.

Users can go long (buy-in) if the market price rises as predicted. If the price does rise, it will make a profit, otherwise, it will lose money; and vice versa.

The PNL calculation of Gate.io changes according to the contract types.

1.The calculation of USDT Contract and Quanto Contract:

PNL = Position Size * Contract Multiplier*(Close Price - Opening Price)

Take BTC_USDT as an example:

If a user goes long with 100 BTC_USDT contracts and 0.001BTC multiplier (referring to the Contract Details). If the average opening price is 32,300USDT, and the average close price is 35,680USDT.

The PNL of the user's contract trading is:

100*0.0001*(35680-32300）=33.8USDT

That the user makes a profit of 33.8 USDT.

2.The calculation of Inverse Contract:

PNL = Contract Size*(1/Opening Price - 1/Close Price)

Take BTC_USD as an example:

If a user goes short with 20,000 BTC_USD contracts. The average opening price is 30,780USDT and the average close price is 31,060USDT.

The PNL of the user's contract trading is:

-20000*(1/30780-1/31060)≈-0.005858BTC

That the user loses 0.005858BTC

Q : Anything users need to be noted ?

A : Yes.

-The position size refers to the number of the contract. Long positions are positive while short positions are negative.

-The close price of unrealized PNL is calculated as mark price, which will not affect the actual PNL.

-Trading Fee and Funding Fee are not included in the calculation of PNL.

-Realized PNL includes Trading Fee, Funding Fee, and Auto-Deleverage PNL(calculated according to the formula above).

A : Next , Contract Order Cost

Q : Please tell me about Instructions of Contract Order Cost

A : Order cost refers to the order margin which users can check on the trading page.

Contract order cost includes the initial margin and trading fee to open.

Order Cost = Initial Margin + Fee to Open

Order Cost = ( Order Value / Leverage ) + Fee to Close + Fee to Open

*Fee refers to Taker Rate ( 0.075% ).

Fee to Open/Close = Order Value * Taker Rate ( 0.075% )

Note:

In the short direction, the value may increase calculated according to the close price, therefore:

Fee to Close ( go short ) = Order Value * (1 + 1/Leverage ) * Taker Rate ( 0.075% )

For example:

A user opens a 4,000USDT short position with 100X leverage, which may be regarded as 1,000 BTC_USDT short contract opening at the price of 40,000USDT with 100X leverage.

Fee to Open = 4,000 * 0.075% = 3 USDT

Fee to Close = 4,000 * ( 1+1/100 ) * 0.075% = 3.03USDT

Initial Margin = ( 4,000/100 ) + 4,000 * 0.075% = 43USDT

Order Price = ( 4,000/100 ) + 4,000 * 0.075% + 4,000 * ( 1 + 1/100 ) * 0.075% = 46.03USDT