Calculating P&L and P&L % (USDT, USDC, Coin-M) on LeveX

For the users on LeveX Exchange, understanding how to calculate Profit and Loss (P&L) and P&L % is important for tracking performance and managing risk effectively. Here is a comprehensive guide to help you calculate P&L and P&L % for USDT/USDC-margined and Coin-margined contracts.

 Fundamental Terms

• P&L (Profit and Loss): This represents the total profit or loss incurred from a trade.
• P&L %: This expresses the profit or loss as a percentage of the initial margin used for the trade.
• Margin: The amount of collateral deposited to open a leveraged position.
• Leverage: Allows traders to control larger positions with a smaller amount of capital

1.  Calculating P&L and P&L % for USDT/USDC-Margined Contracts

USDT/USDC-margined contracts utilize stablecoins for both margin and settlement purposes.

P&L formula: P&L = (Sell Price - Buy Price) × Quantity

        Example:

•   Buy Price: 20,000 USDT
•  Sell Price: 21,000 USDT
•  Quantity: 0.5 BTC

            P&L = (21,000 - 20,000) × 0.5 = 500 USDT

           Formula for P&L %:

        P&L % = (P&L / Margin) × 100

•    Leverage: 10x
•   Margin: (Buy Price × Quantity) / Leverage = (20,000 × 0.5) / 10 = 1,000 USDT

              P&L % = (500 / 1,000) × 100 = 50%

2.  Calculating P&L and P&L % for Coin-Margined Contracts

           Coin-margined contracts use the cryptocurrency itself (e.g., BTC or ETH) as the margin & settlement currency.

       Formula for P&L:

          P&L = Quantity × (1 / Buy Price - 1 / Sell Price)

          Example:

• Buy Price: 20,000 USD
• Sell Price: 21,000 USD
• Quantity: 1 BTC

       P&L = 1 × (1 / 20,000 - 1 / 21,000) = 1 × (0.00005 - 0.00004762) = 0.00000238 BTC

      To convert to USD: P&L = 0.00000238 BTC × 21,000 (Sell Price) = 50 USD

Formula for P&L %:

     P&L % = (P&L in BTC / Margin in BTC) × 100

• Leverage: 5x
• Margin: Quantity / Leverage = 1 BTC / 5 = 0.2 BTC

     P&L % = (0.00000238 / 0.2) × 100 = 1.19%

3. Important Facts 

• Mark Price vs. Last Price: P&L calculations are typically based on the mark price to prevent market manipulation.
• Trading Fees: Always account for fees, as they can impact your net P&L. These fees are charged based on the position size, not the margin.
• Liquidation Risk: Using high leverage increases the risk of liquidation if the market moves against your position.

    Conclusion

 Understanding how to calculate P&L and P&L % is crucial for making informed trading decisions on LeveX. Whether trading USDT/USDC-margined or Coin-margined contracts,  always factor in leverage, margin, and fees to assess your profitability. Good Luck!