Introduction
Understanding how profits and losses are calculated is essential before opening any trading position. This guide breaks down the key variables affecting P&L calculations in USDT perpetual contracts.
1) Average Entry Price
On Bybit, your average entry price changes whenever you add to a position with new orders.
Formula:
Average Entry Price = Total Contract Value in USDT / Total Contract Quantity
Example:
Trader A holds:
- 0.5 BTC long at $5,000
- Later adds 0.3 BTC at $6,000
Calculation:
Total Value = (0.5 × 5,000) + (0.3 × 6,000) = $4,300
Total Quantity = 0.8 BTC
Average Entry Price = $4,300 / 0.8 = **$5,375**
2) Unrealized P&L
Unrealized P&L updates in real-time based on market price movements.
Long Positions
Unrealized P&L = Contract Quantity × (Mark Price − Entry Price)
Example:
0.2 BTC long at $7,000 → Mark price rises to $7,500
P&L = 0.2 × ($7,500 − $7,000) = +$100
Short Positions
Unrealized P&L = Contract Quantity × (Entry Price − Mark Price)
Example:
0.4 BTC short at $6,000 → Mark price drops to $5,000
P&L = 0.4 × ($6,000 − $5,000) = +$400
Key Notes:
a) Settled in USDT (unlike coin-margined contracts).
b) Leverage doesn’t directly amplify P&L—it depends on position size and price movement.
c) Default display uses mark price; hover to see based on index price.
2A) Unrealized P&L Percentage
ROI% = (Unrealized P&L / Position Margin) × 100%
Position Margin = Initial Margin + Closing Fee
Example (10x leverage):
0.2 BTC long at $7,000 → P&L = $100
Initial Margin = (0.2 × $7,000) / 10 = $140
Closing Fee = $0.69
ROI% = ($100 / $140.69) × 100% = 71.07%
👉 Master leverage trading strategies
3) Closed P&L
Realized upon position closure, including fees and funding.
Formula:
Closed P&L = Position P&L − Opening Fee − Closing Fee − Total Funding Paid/Received
Example:
0.4 BTC short at $6,000 → Closed at $5,000:
- Position P&L = +$400
- Fees = $1.32 (open) + $1.10 (close)
- Funding Paid = $2.10
Closed P&L = $400 − $1.32 − $1.10 − $2.10 = $395.48
4) Realized P&L
Realized P&L = Sum of Closed Position P&L − Trading Fees − Funding During Hold
Updates cumulatively until full position closure.
Example (Partial Close):
0.4 BTC short → Close 0.3 at $5,000:
- P&L = +$300
- Fees = $1.32 (open) + $0.83 (close)
- Funding = $1.50
Realized P&L = $296.36 (remaining 0.1 BTC open)
FAQs
Q1: Does higher leverage increase profits?
No. Leverage reduces margin requirements but doesn’t change raw P&L—it affects ROI%.
Q2: Why does my unrealized P&L fluctuate?
It’s based on live mark prices. Hover to see index-price-based P&L.
Q3: Are funding costs included in unrealized P&L?
No. Funding impacts closed P&L only.
Q4: How are fees calculated for partial closes?
Fees are pro-rated based on closed quantity (% of total position).
Key Takeaways
- Monitor average entry price when scaling in/out.
- Use unrealized P&L for live tracking; closed P&L for final profit.
- Factor in fees and funding for accurate realized gains.
For advanced strategies: 👉 Explore perpetual trading tactics