How to calculate CoinEx contract income

Calculating income in CoinEx contract trading involves determining the contract margin, entry price, performance, settlement price, and calculating the contract PnL and realized PnL.

Nov 23, 2024 at 07:16 pm

How to Calculate CoinEx Contract Income

CoinEx contract trading allows users to speculate on the price movements of various cryptocurrencies without owning the underlying assets. Traders can enter into long or short positions, leveraging their capital to potentially amplify their profits. To maximize your earnings in CoinEx contract trading, it's essential to understand how contract income is calculated.

Steps to Calculate CoinEx Contract Income

1. Determine the Contract Margin

The first step is to determine the margin required for your contract position. The margin is the amount of collateral you must hold in your account to open and maintain a contract position. It serves as a buffer against potential losses and ensures that you have sufficient funds to cover any adverse price movements. The margin requirement varies depending on the cryptocurrency and contract size you choose. You can find the margin requirement by checking the contract specifications on the CoinEx platform.

For example, suppose you want to open a long position on a BTCUSD contract with a contract size of 100 USDT. The margin requirement is 10%, which means you need to hold 10 USDT in your account to open the position.

2. Calculate the Contract Entry Price

The contract entry price is the price at which you enter into the contract position. This price determines the initial direction of your trade. If you enter a long position, the contract entry price is the current price at which you buy the cryptocurrency. Conversely, if you enter a short position, the contract entry price is the current price at which you sell the cryptocurrency.

Continuing with the example above, suppose you enter a long position on BTCUSD at a price of 20,000 USDT. This price becomes your contract entry price.

3. Monitor the Contract Performance

Once you have entered into a contract position, you need to monitor its performance closely. The contract price will fluctuate in real-time, and your profit or loss will change accordingly. If the price moves in your favor, your profit will increase; however, if the price moves against you, your loss will increase.

4. Calculate the Contract Settlement Price

The contract settlement price is the price at which your contract position is closed. This price determines your final profit or loss. When you close a long position, the settlement price is the current price at which you sell the cryptocurrency. Conversely, when you close a short position, the settlement price is the current price at which you buy back the cryptocurrency.

5. Determine the Contract PnL

The contract profit and loss (PnL) is the difference between the contract settlement price and the contract entry price. This calculation determines your actual profit or loss on the contract position. If the settlement price is higher than the entry price for a long position or lower than the entry price for a short position, your PnL will be positive, indicating a profit. Conversely, if the settlement price is lower than the entry price for a long position or higher than the entry price for a short position, your PnL will be negative, indicating a loss.

6. Calculate the Realized PnL

The realized PnL represents the actual profit or loss that you have realized from your contract position. This calculation considers the trading fees and financing fees that may have been incurred during the trade. To calculate the realized PnL, deduct the trading fees and financing fees from the contract PnL. The resulting amount is your realized profit or loss.