Calculation of Profit and Loss for Expiry Futures Contracts

Understanding how to calculate profit and loss (PnL) for expiry futures contracts is essential for traders managing leveraged positions. This guide breaks down key formulas, examples, and FAQs to help you navigate futures trading confidently.

Core Formulas for PnL Calculation

1. Size

• Definition: The number of contracts or value held in a position.

• One-way Mode:

  • Long positions: Positive size (+).
  • Short positions: Negative size (−).
• Hedge Mode: Both long and short positions use positive sizes.

2. Entry Price

• Adjusted when adding to positions or reverse-opening.

• Coin-margined Contracts:

  Entry Price = (Current Size + Added Size) / (Current Size / Entry Price + Added Size / New Entry Price)

• U-stablecoin-margined Contracts:

  Entry Price = (Current Size × Entry Price + Added Size × New Entry Price) / (Current Size + Added Size)

3. Floating PnL

• Coin-margined Contracts:

  • Long: Face Value × |Size| × Multiplier × (1/Entry Price − 1/Mark Price)
  • Short: Face Value × |Size| × Multiplier × (1/Mark Price − 1/Entry Price)

• U-stablecoin-margined Contracts:

  • Long: Face Value × |Size| × Multiplier × (Mark Price − Entry Price)
  • Short: Face Value × |Size| × Multiplier × (Entry Price − Mark Price)

4. Floating PnL Ratio

(Floating PnL / Position’s Margin) × 100%

5. Closed PnL

• Similar to Floating PnL but uses Close Price instead of Mark Price.

6. Settlement PnL

• Replaces Entry Price with Settlement Price in PnL formulas.

7. Realized PnL

Closed PnL + Settlement PnL + Trading Fees

8. Realized PnL Ratio

(Realized PnL / Closed Position’s Margin) × 100%

Practical Examples

Example 1: Entry Price Adjustment

• Scenario: Hold 10 BTC-USDT contracts at 100,000 USDT; add 5 contracts at 160,000 USDT.

• Calculation (U-stablecoin-margined):

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

Example 2: Floating PnL

• Scenario: Long 10 BTC-USDT contracts (Face Value: 0.01 BTC) at 100,000 USDT; Mark Price: 160,000 USDT.

• Floating PnL:

  0.01 × 10 × 1 × (160,000 − 100,000) = 6,000 USDT

Example 3: Floating PnL Ratio

• Scenario: Floating PnL = 6,000 USDT; Margin = 1,600 USDT.

• Ratio:

  (6,000 / 1,600) × 100% = 375%

FAQs

1. What is the difference between Floating PnL and Realized PnL?

• Floating PnL reflects unrealized gains/losses based on current Mark Price.
• Realized PnL includes closed positions, settlements, and fees.

2. How does leverage affect PnL calculations?

Leverage amplifies both gains and losses. A 5x leverage means a 1% price move results in a 5% PnL change.

3. Why does Entry Price change when adding to a position?

The new Entry Price is a weighted average of existing and added positions, ensuring accurate PnL tracking.

4. Where can I find settlement rules?

👉 Detailed settlement rules are available on OKX’s official documentation.

5. How are trading fees factored into PnL?

Fees reduce Realized PnL. For example, a 0.05% fee on a 10,000 USDT trade deducts 5 USDT.

6. What happens if Mark Price equals Entry Price?

Floating PnL becomes zero, but fees and settlements may still affect Realized PnL.

Key Takeaways

• Use size-adjusted Entry Prices for accurate PnL tracking.
• Monitor Floating PnL Ratio to assess position health.
• Leverage magnifies risks—always manage margin carefully.

👉 Explore advanced trading strategies to optimize your futures performance.

Disclaimer: Trading futures involves significant risk. Past performance does not guarantee future results. Consult OKX’s 👉 Risk Disclosure for details.