Calculating Profit and Loss for Expiry Futures Contracts

Understanding Key Concepts

Contract Size

Definition: The number of contracts or the crypto/fiat value held in a position.
One-way Mode:
- Long positions: Positive size
- Short positions: Negative size
Hedge Mode: Both long and short positions show positive sizes.

Entry Price Dynamics

Entry prices adjust when:

Increasing position size
Reverse-opening positions
Settlement (replaces entry price with settlement price)

Formulas:
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Coin-margined Contracts:

Entry Price = (Current Size + Added Size) / (Current Size / Entry Price + Added Size / Added Size's Entry Price)

U-stablecoin-margined Contracts:

Entry Price = (Current Size × Entry Price + Added Size × Added Size's Entry Price) / (Current Size + Added Size)

Profit and Loss Calculations

Metric	Formula	Notes
Floating PnL		Unrealized gains/losses
Coin-margined (Long)	`Face Value ×	Size	× Multiplier × (1/Entry Price - 1/Mark Price)`
Coin-margined (Short)	`Face Value ×	Size	× Multiplier × (1/Mark Price - 1/Entry Price)`
USDT-margined (Long)	`Face Value ×	Size	× Multiplier × (Mark Price - Entry Price)`
USDT-margined (Short)	`Face Value ×	Size	× Multiplier × (Entry Price - Mark Price)`
Floating PnL Ratio	`(Floating PnL / Position Margin) × 100%`	Measures ROI
Closed PnL		Realized upon position closure
Coin-margined (Long)	Replace "Mark Price" with "Close Price" in Floating PnL formula
USDT-margined (Short)	Replace "Mark Price" with "Close Price" in Floating PnL formula
Settlement PnL	Replace "Mark Price" with "Settlement Price" in Floating PnL formulas	Occurs at contract expiry
Realized PnL	`Closed PnL + Settlement PnL + Trading Fees`	Includes all finalized gains/losses
Realized PnL Ratio	`(Realized PnL / Closed Position's Margin) × 100%`	Post-trade performance

Practical Examples

Example 1: Entry Price Calculation

USDT-margined Contract

Current Position: 10 contracts @ 100,000 USDT

Added Position: 5 contracts @ 160,000 USDT

(100,000×10 + 160,000×5) / (10+5) = 120,000 USDT

Coin-margined Contract

Current Position: 10 contracts @ 100,000 USD

Added Position: 5 contracts @ 80,000 USD

(10+5) / (10/100,000 + 5/80,000) = 92,307 USD

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Example 2: Floating PnL

USDT-margined Long Position

Face Value: 0.01 BTC
Size: 10 contracts

Entry: 100,000 USDT | Mark: 160,000 USDT

0.01 × 10 × (160,000 - 100,000) = 6,000 USDT profit

Coin-margined Short Position

Face Value: 100 USD
Size: 1,000 contracts
Entry: 100,000 USD | Mark: 80,000 USD
× 1,000 × (1/80,000 - 1/100,000) = 0.25 BTC profit

Example 3: PnL Ratios

Floating PnL Ratio

Floating PnL: 6,000 USDT
Margin: 1,600 USDT
```
(6,000 / 1,600) × 100% = 375%
```

FAQ Section

1. How does leverage affect PnL calculations?

Leverage amplifies both gains and losses but doesn't change the underlying PnL formulas. It impacts margin requirements and liquidation risks.

2. Why do entry prices change when adding to positions?

The system calculates a weighted average price to reflect your true cost basis across multiple entries.

3. What's the difference between Floating and Realized PnL?

Floating: Potential profit if you closed now
Realized: Actual profit from completed trades

4. How often are mark prices updated?

Mark prices typically update in real-time to ensure accurate PnL reflection.

5. Do fees impact PnL calculations?

Yes, trading fees are factored into Realized PnL but not Floating PnL.

6. Can PnL ratios exceed 100%?

Absolutely, especially with high leverage or significant price movements.

Risk Disclosure

Digital asset trading involves substantial risk. Leverage magnifies volatility exposure, potentially leading to total margin loss. Past performance never guarantees future results. Consult financial advisors to assess suitability. OKX provides no investment warranties—users bear full responsibility for trading decisions.