Regardless of any trades, it is important to understand how P&L is calculated before entering one. In sequential order, traders need to understand the following variables in order to accurately calculate their P&L. 

 

 

• Average Entry Price of position
• Unrealized P&L and Unrealized P&L% of the position
• Closed P&L
• Realized P&L

 

 

 

 

Average Entry Price (AEP) of position

In Bybit, whenever traders add on to their position via new orders, AEP will change. 

 

For example: Trader A holds an existing BTCUSDT open buy position of 0.5 qty with an entry price of USD 5,000.  After an hour, Trader A decided to increase his buy position by opening an additional 0.3 qty with an entry price of USD 6,000.

 

Below shows how the formula for AEP and the computation steps: 

Average entry price = Total contract value in USDT/Total quantity of contracts

Total contract value in USDT = ( (Quantity1 x Price1) + (Quantity2 x Price2)...)

 

By using the figures above:

Total contract value in USDT 

= ( (Quantity1 x Price1) + (Quantity2 x Price2) )

= ( (0.5 x 5,000) + (0.3 x 6,000) )

= 4300

 

Total quantity of contracts

= 0.5 + 0.3

= 0.8 BTC

 

Average Entry Price

 = 4,300 / 0.8

= 5,375

 

 

 

 

 

Unrealized P&L and Unrealized P&L% of the position

 

Unrealized P&L

Once an order is successfully executed, an open position and its real-time unrealized P&L will be shown inside the positions tab. Depending on which side of the trade you are in, the formula used to calculate the unrealized P&L will differ.

 

For long position

For example: Trader B holds an existing BTCUSDT open buy position of 0.2 qty with an entry price of USD 7,000. When the Last Traded Price inside the order book is showing USD 7,500, the unrealized P&L shown will be 100 USDT.

 

Unrealized P&L = Contract Qty x (Last Traded Price - Entry Price)

= 0.2 x (7,500 - 7,000)

= 100 USDT

 

 

 

For short position

For example: Trader C holds an existing BTCUSDT open sell position of 0.4 qty with an entry price of USD 6,000. When the Last Traded Price inside the order book is showing USD 5,000, the unrealized P&L shown will be 400 USDT.

 

Unrealized P&L = Contract Qty x (Entry Price - Last Traded Price)

= 0.4 x ( 6,000 - 5,000)

= 400 USDT

 

Notes:

• In USDT contracts, your P&L is also settled in USDT. This is opposite to inverse contracts where P&L is settled depending on the coin being traded (ex. BTCUSD inverse is settled in BTC).

• When the price movement is by a certain price (example USD 1,000) in the profitable or non-profitable direction, assuming the position size of 1 BTC, this means that a trader will gain or lose USD 1,000 respectively. 

• Increasing leverage does not directly multiply the profits/losses. Instead, profits and losses are determined by the position size and price movement. In short,

  • The higher the leverage, the lower the margin collateral needed to open your position

  • The larger the contract quantity, the bigger the profits/losses

  • The larger the price movement relative to the entry price, the bigger the profits/losses

• The default unrealized P&L is shown based on the Last Traded Price. When hovering a mouse cursor on top of the figure, the unrealized P&L will change and show an unrealized P&L based on the Mark Price

• Last but not least, unrealized P&L does not factor in any trading or funding fees which traders may have received/paid out in the process of opening and holding the position. 

 

 

 

Unrealized P&L%

Unrealized P&L% basically shows the Return on Investment (ROI) of the position in its percentage form. Similar to Unrealized P&L, the figure shows changes depending on the movement of the Last Traded Price. As such, the Unrealized PNL% or ROI formula is below.

 

Unrealized P&L% = [ Position's unrealized P&L / Position Margin ] x 100%

Position Margin = Initial margin + Fee to close

 

Using Trader B as an example, Trader B holds an existing BTCUSDT open buy position of 0.2 qty with an entry price of USD 7,000. When the Last Traded Price inside the order book is showing USD 7,500, the unrealized P&L shown will be 100 USDT. Assuming the leverage used is 10x. 

 

Based on our earlier calculation, the position's unrealized P&L = 100 USDT

Initial margin = (Qty x Entry price) / leverage = (0.2 x 7000) /10 = 140 USDT

Fee to close = Bankruptcy price x Qty x 0.055% = 6,300 x 0.2 x 0.055% = 0.693 USDT

Unrealized P&L% = [ 100 USDT / ( 140 USDT + 0.693 USDT ) ] x 100% = 71.07%

 

Notes:

• Some traders may have misunderstood this but adjustments to increase leverage do not increase your unrealized profits. Instead, traders will see an increase in unrealized P&L% due to a reduction in your position margin and not because of an increase in actual profits. Using Trader B as an example again, notice that regardless if leverage is 10x, 5x or 20x, the unrealized P&L remains the same.

  • If Trader B uses the same 10x leverage, his unrealized P&L = 100 USDT, unrealized P&L% = 71.07%

  • If Trader B reduces the leverage to 5x,  his unrealized P&L = 100 USDT, unrealized P&L% = 35.62%

  • If Trader B increases the leverage to 20x  his  unrealized P&L = 100 USDT, unrealized P&L% = 141.45%

• For cross margin mode, the position margin will always be calculated using the maximum leverage allowed under the current risk limit level for the particular coin (Example BTCUSDT = 100x).

 

 

 

 

 

Closed P&L

When traders finally close their position, the P&L becomes realized and is recorded inside the Closed P&L tab within the Assets page. Unlike unrealized P&L, there are some major differences in the calculation. Below summarizes the differences between the unrealized P&L and closed P&L.

 

 

 

Therefore, assuming full closing of the entire position, the formula for calculating Closed P&L is as follows:

 

Closed P&L = Position P&L - Fee to open - Fee to close - Sum of all funding fees paid/received

 

Using Trader C as an example, Trader C holds an existing BTCUSDT open sell position of 0.4 qty with an entry price of USD 6,000. When the Last Traded Price inside the order book is showing USD 5,000, trader C decided to close the entire position via the Close by Market function. 

 

Assuming that Trader C also opened the position via a market order and funding fees totaling 2.10 USDT were paid out while holding the position. 

Fee to open = Qty x Entry price x 0.055% = 1.32 USDT paid out

Fee to close = Qty x Exit price x 0.055% = 1.1 USDT paid out

Sum of all funding fees paid/received = 2.10 USDT paid out

Closed P&L = 400 - 1.32 - 1.1 - 2.10 = 395.48 USDT

 

Notes:

• The above example only applies when the entire position is opened and closed via a single order in both directions.

• For partial closing of positions, Closed P&L will prorate all fees (fee to open and funding fee(s)) according to the percentage of the position partially closed and use the pro-rated figure to compute the Closed P&L.

• Traders can view their Closed P&L history from here.

 

 

 

 

 

Realized P&L

 

 

 

Realized P&L = Sum of realized position P&L + Trading fees + Funding fees over the period of position opening

 

Realized P&L can be found on the position tab and it shows the sum of realized P&L of the position over the period. This includes all the trading fees, funding fees, and any position P&L realized from partial closing (same formula as unrealized P&L). 

 

We can use Trader C as an example. Assuming Trader C did not fully close the 0.4 qty short position, but only 0.3 qty with an exit price of $5,000.

 

Position's P&L  = 0.3 x [ 6,000 - 5,000 ] = 300 USDT

Fee to open = 0.4 x 6,000 x 0.055% = 1.32 USDT

Fee to close = 0.3 x 5,000 x 0.055% = 0.825 USDT

Sum of funding fees paid = 1.5 USDT

Realized P&L of the position = 300 - 1.32 - 0.825 - 1.5 = 296.355 USDT

 

Now, Trader C is left with 0.1 qty of short position. He then opened another 0.2 qty  of short position with an entry price of USD 5,500, the realized P&L for the position is as follows:

 

Realized P&L carried forward  = 296.355 USDT

Fee to open = 0.2 x 5,500 x 0.055% = 0.605 USDT

Realized P&L (up-to-date) = 296.355 - 0.605 = 295.75 USDT

Outstanding Open Position = 0.3 Qty of Short Position

 

The difference between the realized P&L and closed P&L is that for Closed P&L, in the event of partial closing of positions, it will prorate all fees (fee to open and funding fee(s)) according to the percentage of the position partially closed and use the pro-rated figure to compute the Closed P&L while the realized P&L will update in real time and accumulate until the respective direction of position is fully closed. 

 

If Trader C places a 0.5 qty long order, the 0.3 qty short position will be closed and a new 0.2 qty long position will be opened. The realized P&L will recalculate and show the realized P&L of the 0.2 qty long position. 

 

Note: The feature will be supported on July 13, 2022. Hence, any realized P&L of the position that was opened before and yet to be closed after July 13, 2022 will not be captured and included.