Calculation of Expiry Futures Contracts' Profit and Loss

Key Terminologies and Formulas

Term	Definition & Formula
Size	Number of contracts held. For One-way mode: long = +ve, short = -ve. For Hedge mode: both = +ve.
Entry Price	Adjusts with position changes. Coin-margined: `(Current Size + Added Size) / (Current Size/Entry Price + Added Size/New Price)`. USDT-margined: `(Current Size × Entry Price + Added Size × New Price) / (Current Size + Added Size)`.
Floating PnL	Coin-margined long: `Face Value × \	Size\	× Multiplier × (1/Entry - 1/Mark)`. USDT-margined short:` Face Value × \	Size\	× Multiplier × (Entry - Mark)`.
Closed PnL	Similar to Floating PnL but uses close price instead of mark price.
Settlement PnL	Uses settlement price. Rules vary by contract type.

Scenario (USDT-margined):

Current: 10 contracts @ 100,000 USDT.
Add: 5 contracts @ 160,000 USDT.
New Entry Price:
(10×100,000 + 5×160,000) / (10+5) = 120,000 USDT.

Scenario (Coin-margined):

Short 10 contracts @ 100,000 USD.
Add 5 contracts @ 80,000 USD.
New Entry Price:
(10+5) / (10/100,000 + 5/80,000) = 92,307 USD.

USDT-margined Long:

Face Value: 0.01 BTC, Size: 10, Mark: 160,000 USDT.
PnL: 0.01 × 10 × (160,000 - 100,000) = 6,000 USDT.

Coin-margined Short:

Face Value: 100 USD, Size: 1,000, Mark: 80,000 USD.
PnL: 100 × 1,000 × (1/80,000 - 1/100,000) = 0.25 BTC.

Example:

1. How does settlement affect entry price?
Settlement replaces the entry price with the settlement price, resetting PnL calculations.

2. What’s the difference between Closed PnL and Realized PnL?
Closed PnL reflects trades, while Realized PnL includes fees and settlements.

3. Why is Floating PnL Ratio important?
It measures ROI on margin, helping assess position efficiency.

4. Can entry price decrease after adding positions?
Yes, if new positions are at lower prices (long) or higher prices (short).

5. How do fees impact Realized PnL?
Fees reduce net gains; always factor them into profit calculations.