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How to calculate Bybit contract returns

To calculate the returns on a Bybit contract, traders should consider the contract size, entry and exit prices, funding fees, and whether the position is long or short.

Nov 07, 2024 at 10:14 pm

How to Calculate Bybit Contract Returns

Bybit, a popular cryptocurrency derivatives exchange, offers a variety of contract types that allow traders to gain exposure to the underlying asset without taking ownership of it. These contracts can be used for hedging, speculation, or arbitrage.

In order to calculate the returns on a Bybit contract, you need to understand the following:

  • Contract size: The size of a contract is the number of units of the underlying asset that it represents. For example, a BTC/USD contract at Bybit represents 1 BTC.
  • Entry price: The entry price is the price at which you purchased the contract.
  • Exit price: The exit price is the price at which you sold the contract.
  • Funding fee: The funding fee is a periodic payment that is paid to (or by) you depending on the direction of the contract.
  • Profit/loss: The profit or loss on a contract is the difference between the entry price and the exit price, plus or minus the funding fee.

Calculating Long Contract Returns

1. Initial Considerations

  • Determine the contract size (e.g., 1 BTC) and the entry price.

2. Calculate Exit Price Profit/Loss

  • Multiply the contract size by the difference between the entry price and the exit price.
  • If the exit price is higher than the entry price, this value will be positive (profit); if it's lower, it will be negative (loss).

3. Factor in Funding Fees

  • Determine the cumulative funding fees incurred over the holding period.
  • Add this value to the profit/loss from step 2 if you paid funding fees, or subtract it if you received funding fees.

4. Total Return

  • The total return on the long contract is the sum of the exit price profit/loss and the funding fees.

Calculating Short Contract Returns

1. Initial Considerations

  • Determine the contract size (e.g., 1 BTC) and the entry price.

2. Calculate Exit Price Profit/Loss

  • Multiply the contract size by the difference between the entry price and the exit price.
  • If the exit price is lower than the entry price, this value will be positive (profit); if it's higher, it will be negative (loss).

3. Factor in Funding Fees

  • Determine the cumulative funding fees incurred over the holding period.
  • Subtract this value from the profit/loss from step 2 if you paid funding fees, or add it if you received funding fees.

4. Total Return

  • The total return on the short contract is the sum of the exit price profit/loss and the funding fees.

Disclaimer:info@kdj.com

The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!

If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.

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