Open Position, Close Position and PNL Calculation

Open Position:

A contract account holding BTC can open a position, that is, to establish a long position (going long, holding long positions after the transaction) or to establish a short position (going short, holding short positions after the transaction).

Going Long: When the future market is bullish, a certain number of new contracts will be bought and the “going long” operation will be conducted, which will increase the long positions after the successful operation.

Going Short: When the future market is bearish, a certain number of new contracts will be sold and the “going short” operation will be conducted, which will increase the short positions after the successful operation.

Close Position:

Selling Long: When the future market is no longer bullish and part or all of the long position contracts held are sold, the “close position” operation is conducted in the long positions, and the long positions will be reduced after the successful operation.

Buying Short: When the future market is no longer bearish and part or all of the short position contracts held are sold, the “close position” operation is conducted in the short positions, and the short positions will be reduced after the successful operation.

After a position is opened, positions in the corresponding direction are held. When the position is not closed, the PNL floating with the volatile price is unrealized PNL.

Unrealized PNL of BTCUSDT long position = (1/opening price-1/current price) * amount of holding positions; unrealized PNL of ETHUSDT long position = (current price-opening price)* amount of holding positions* multiplier

Unrealized PNL of BTCUSDT short position = (1/current price-1/opening price) * amount of holding positions; unrealized PNL of ETHUSDT short position = (opening price-current price)*amount of holding positions*multiplier

Unrealized PNL cannot be cashed out. After the position is closed, this part of unrealized PNL is settled into available balance of the contract account to be used as margin for opening a position or to be cashed out.

Example of PNL:

John goes long 1,000 BTCUSDT contracts at an average entry price of 1,000 USDT. The current BTCUSDT mark price is 1,250 USDT, and the last price is 1,500 USDT. Unrealized PNL are calculated based on the mark price, and realized PNL are calculated based on the actual trading price.

Unrealized profit = ($1/$1,000 — $1/$1,250) * 1,000 = 0.20 BTC

Zhiming decides to sell 500 BTCUSDT contracts at $1,500 to realize some profit.

Realized profit = ($1/1,000 — $1/$1,500) * 500 = 0.17 BTC