Understanding how profits and losses are calculated before opening any trading position is crucial. This guide will walk you through the key variables affecting P&L calculations in USDT perpetual contracts, presented in a logical sequence for clarity.
1) Average Opening Price
On Bybit, the average opening price recalculates whenever a trader adds to their position with new orders.
Example: Trader A holds a 0.5 BTC long position opened at $5,000. After an hour, they increase the position by 0.3 BTC at $6,000.
Formula:
Average Opening Price = Total Contract Value (USDT) / Total Contract Quantity
Steps:
- Total Contract Value = [ (0.5 × 5,000) + (0.3 × 6,000) ] = $4,300
- Total Contract Quantity = 0.5 + 0.3 = 0.8 BTC
- Average Opening Price = 4,300 / 0.8 = $5,375
2) Unrealized P&L
Unrealized P&L reflects the profit or loss of an open position and updates in real-time based on the latest market price.
For Long Positions
Unrealized P&L = Contract Quantity × (Current Price − Opening Price)
Example: Trader B holds 0.2 BTC long at $7,000. If the current price rises to $7,500:
0.2 × (7,500 − 7,000) = +100 USDT
For Short Positions
Unrealized P&L = Contract Quantity × (Opening Price − Current Price)
Example: Trader C holds 0.4 BTC short at $6,000. If the price drops to $5,000:
0.4 × (6,000 − 5,000) = +400 USDT
Key Notes:
- USDT contracts settle P&L in USDT (unlike coin-margined contracts).
- Leverage does not directly amplify P&L; it depends on position size and price movement.
👉 Learn how leverage affects your trades
2A) Unrealized P&L Percentage (%)
This metric shows the Return on Investment (ROI) for a position:
Unrealized P&L % = (Unrealized P&L / Position Margin) × 100%
Position Margin = Initial Margin + Liquidation Fee
Example: Trader B’s position:
- Unrealized P&L = 100 USDT
- Initial Margin = (0.2 × 7,000) / 10x = 140 USDT
- Liquidation Fee = 6,300 × 0.2 × 0.055% = 0.693 USDT
- ROI = [100 / (140 + 0.693)] × 100% = 71.07%
Caution: Higher leverage reduces margin but increases ROI %—not actual profit.
3) Closed P&L
Closed P&L is realized upon position liquidation and accounts for all fees:
Closed P&L = Position P&L − Opening Fee − Closing Fee − Total Funding Fees
Example: Trader C closes a 0.4 BTC short:
- Position P&L = +400 USDT
- Fees: 1.32 (open) + 1.10 (close) + 2.10 (funding) = 4.52 USDT
- Net P&L = 400 − 4.52 = 395.48 USDT
4) Realized P&L
Realized P&L = Sum of Closed Position P&L − Trading Fees − Funding Fees
This accumulates across partial/full closures and resets when positions reverse direction.
Example: Trader C partially closes 0.3 BTC:
- P&L: 300 − 1.32 (open) − 0.825 (close) − 1.50 (funding) = 296.355 USDT
FAQ
Q: Does leverage increase profit?
A: No. Leverage reduces margin requirements but doesn’t directly affect P&L magnitude.
Q: Why is my ROI % higher with 20x leverage?
A: Higher leverage lowers margin, making the same profit seem larger relative to margin.
Q: How are funding fees factored in?
A: They’re deducted from Closed P&L and updated hourly for open positions.
👉 Master advanced trading strategies
Final Notes:
- Always account for fees in net P&L calculations.
- Monitor both unrealized and realized P&L for accurate performance tracking.