Overview
Perpetual contracts are a type of financial derivative suitable for virtual currencies. Users can choose to go long or short depending on the market conditions to make a profit.
If the market price is expected to rise, the user can choose to go long (buy);
if the market price is expected to fall, the user can choose to go short (sell).
The calculation of profit and loss varies depending on the direction chosen.
Profit and Loss Calculation
The formula for profit and loss calculation is as follows:
Realized Profit and Loss
Long Position:
Realized Profit and Loss = Position Size × (Closing Price - Opening Price)
Example: Suppose a user opens a long position of 0.1 BTC in the USDT/BTC contract at an average opening price of 80,000 USDT, and then closes the position at an average closing price of 85,000 USDT.
Realized Profit and Loss = 0.1 × (85,000 - 80,000) = 500 USDTShort Position:
Realized Profit and Loss = Position Size × (Opening Price - Closing Price)Example: Suppose a user opens a short position of 0.1 BTC in the USDT/BTC contract at an average opening price of 80,000 USDT, and then closes the position at an average closing price of 85,000 USDT.
Realized Profit and Loss = 0.1 × (80,000 - 85,000) = -500 USDT
Unrealized Profit and Loss
Long Position:
Unrealized Profit and Loss = Position Size × (Mark Price - Opening Price) Example: Suppose a user opens a long position of 0.1 BTC in the USDT/BTC contract at an average opening price of 80,000 USDT, and the latest mark price is 82,000 USDT.
Unrealized Profit and Loss = 0.1 × (82,000 - 80,000) = 200 USDTShort Position:
Unrealized Profit and Loss = Position Size × (Opening Price - Mark Price)
Example: Suppose a user opens a short position of 0.1 BTC in the USDT/BTC contract at an average opening price of 80,000 USDT, and the latest mark price is 82,000 USDT.
Unrealized Profit and Loss = 0.1 × (80,000 - 82,000) = -200 USDT