Key Terms and Formulas
Below is a breakdown of essential terms and their corresponding formulas for calculating profit and loss in expiry futures contracts:
| Term | Formula Description | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Size | Number of contracts held. Positive for long positions (One-way mode), negative for short positions (One-way mode), and always positive in Hedge mode. | ||||||||
| Entry Price | Adjusted when adding positions or reverse-opening. Coin-margined: (Current Size + Added Size) / (Current Size / Entry Price + Added Size / Added Size's Entry Price). U-stablecoin-margined: (Current Size × Entry Price + Added Size × Added Size's Entry Price) / (Current Size + Added Size). | ||||||||
| Floating PnL | Coin-margined: 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**: Long: Face Value × \ | Size\ | × Multiplier × (Mark Price - Entry Price). Short: Face Value × \ | Size\ | × Multiplier × (Entry Price - Mark Price)`. |
| Floating PnL Ratio | (Floating PnL / Position’s Margin) × 100%. | ||||||||
| Closed PnL | Coin-margined: Long: `Face Value × \ | Size\ | × Multiplier × (1/Entry Price - 1/Close Price). Short: Face Value × \ | Size\ | × Multiplier × (1/Close Price - 1/Entry Price)`. U-stablecoin-margined: Formulas mirror Floating PnL but use Close Price instead of Mark Price. | ||||
| Settlement PnL | Replaces Close Price with Settlement Price in Closed PnL formulas. | ||||||||
| Realized PnL | Closed PnL + Settlement PnL + Trading Fees. | ||||||||
| Realized PnL Ratio | (Realized PnL / Closed Position’s Margin) × 100%. |
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Practical Examples
1. Calculating Entry Price
U-Stablecoin-Margined Contracts
- Scenario: Long 10 BTC-USDT contracts at 100,000 USDT entry; add 5 contracts at 160,000 USDT.
- Formula:
(10 × 100,000 + 5 × 160,000) / (10 + 5) = 1,800,000 / 15 = 120,000 USDT.
Coin-Margined Contracts
- Scenario: Short 10 BTC-USD contracts at 100,000 USD entry; add 5 contracts at 80,000 USD.
- Formula:
(10 + 5) / (10/100,000 + 5/80,000) ≈ 15 / 0.0001625 ≈ 92,307 USD.
2. Floating PnL Calculation
U-Stablecoin-Margined Long Position
- Data: Face value = 0.01 BTC, Size = 10, Multiplier = 1, Entry = 100,000 USDT, Mark = 160,000 USDT.
- PnL:
0.01 × 10 × 1 × (160,000 - 100,000) = 6,000 USDT.
Coin-Margined Short Position
- Data: Face value = 100 USD, Size = 1,000, Multiplier = 1, Entry = 100,000 USD, Mark = 80,000 USD.
- PnL:
100 × 1,000 × 1 × (1/80,000 - 1/100,000) ≈ 0.25 BTC.
3. Floating PnL Ratio
- Scenario: Floating PnL = 6,000 USDT, Margin = 1,600 USDT.
- Ratio:
(6,000 / 1,600) × 100% = 375%.
FAQs
1. How does settlement affect entry price?
Settlement replaces the entry price with the settlement price, recalculating PnL based on the final price.
2. What’s the difference between Floating and Realized PnL?
Floating PnL reflects unrealized gains/losses based on mark price, while Realized PnL includes closed trades, settlements, and fees.
3. Why is size negative in One-way mode for short positions?
Negative size simplifies PnL calculations by distinguishing long vs. short positions without separate formulas.
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Risk Disclaimer
Trading digital assets involves high risk, including potential loss of capital. Leverage magnifies risks and rewards. Past performance ≠ future results. Consult your financial advisor before trading.
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