Margin and Profit/Loss Calculations

1. Opening Margin

The opening margin consists of two components:

• Initial Margin

• Opening Loss

Including the opening loss (if any) at the time of order placement helps prevent immediate liquidation due to unfavorable price movement at the time of opening.

1.1 Initial Margin

$$\text{Initial Margin} = \frac{\text{Notional Value}}{\text{Leverage}}$$

For USDT-margined contracts:

$$\text{Notional Value} = \text{Order Price} \times \text{Quantity} \times \text{Contract Size}$$

1.2 Opening Loss

$$\text{Opening Loss} = \text{Quantity} \times \text{Contract Size} \times \left| \min \left( 0,\ \text{Order Direction} \times (\text{Mark Price} - \text{Order Price}) \right) \right|$$

Where:

• Order Direction = 1 for Long, -1 for Short

Example

• Contract: BTC/USDT

• Order Price: 60,000 USDT

• Mark Price: 55,000 USDT

• Order Quantity: 10,000 contracts

• Contract Size: 0.0001 BTC

• Leverage: 10×

$$\text{Initial Margin} = \frac{60,000 \times 10,000 \times 0.0001}{10} = 6,000\ \text{USDT}$$

$$\text{Opening Loss} = 10,000 \times 0.0001 \times 5,000 = 5,000\ \text{USDT}$$

$$\text{Opening Margin} = 6,000 + 5,000 = 11,000\ \text{USDT}$$

2. Average Opening Price

When a trader opens multiple positions, the system recalculates the average opening price using a weighted average:

$$\text{Average Opening Price} = \frac{\sum (\text{Contract Quantity} \times \text{Price})}{\sum \text{Contract Quantity}}$$

Example

• Position 1: 0.5 BTC at 5,000 USDT

• Position 2: 0.3 BTC at 6,000 USDT

$$\text{Total Value} = (0.5 \times 5,000) + (0.3 \times 6,000) = 2,500 + 1,800 = 4,300$$

$$\text{Total Quantity} = 0.5 + 0.3 = 0.8\ \text{BTC}$$

$$\text{Average Opening Price} = \frac{4,300}{0.8} = 5,375\ \text{USDT}$$

3. Profit and Loss Calculation

The unrealized profit and loss (PnL) is shown in real time and calculated differently for long and short positions.

For Long Positions

$$\text{PnL} = \text{Quantity} \times (\text{Mark Price} - \text{Average Opening Price})$$

Example:

• Quantity: 0.2 BTC

• Opening Price: 7,000

• Mark Price: 7,500

$$\text{PnL} = 0.2 \times (7,500 - 7,000) = 100\ \text{USDT}$$

For Short Positions

$$\text{PnL} = \text{Quantity} \times (\text{Average Opening Price} - \text{Mark Price})$$

Example:

• Quantity: 0.4 BTC

• Opening Price: 6,000

• Mark Price: 5,000

$$\text{PnL} = 0.4 \times (6,000 - 5,000) = 400\ \text{USDT}$$