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  • Market Cap: $2.9779T 0.640%
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  • Market Cap: $2.9779T 0.640%
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How to calculate the profit of Bybit contract

To calculate profit in Bybit contract trading, subtract the entry price from the selling price for long contracts or vice versa for short contracts, and multiply the difference by the contract size, factoring in trading fees, funding fees, and leverage.

Nov 18, 2024 at 06:53 am

How to Calculate the Profit of Bybit Contract

Step 1: Understanding Contract Basics

  • Contracts vs. Spot Trading: Unlike spot trading, where you buy or sell an asset outright, contracts involve agreements to buy or sell an asset at a predetermined price in the future.
  • Long vs. Short Contracts: Long contracts reflect your belief that the asset's price will rise, while short contracts indicate your expectation of a price decline.

Step 2: Calculating Profit for Long Contracts

  • Formula: Profit for long contracts = (Selling Price - Entry Price) X Contract Size
  • Steps:

    • Determine the selling price at which you closed the contract.
    • Subtract the price at which you entered the contract from the selling price.
    • Multiply the difference by the contract size (e.g., 1 BTC for a 1 BTC contract).

Example: If you enter a long contract at $20,000 with a 1 BTC contract size and sell it at $22,000, your profit would be ($22,000 - $20,000) X 1 BTC = $2,000.

Step 3: Calculating Profit for Short Contracts

  • Formula: Profit for short contracts = (Entry Price - Selling Price) X Contract Size
  • Steps:

    • Determine the entry price at which you opened the contract.
    • Subtract the price at which you closed the contract from the entry price.
    • Multiply the difference by the contract size.

Example: If you enter a short contract at $22,000 with a 1 BTC contract size and sell it at $20,000, your profit would be ($22,000 - $20,000) X 1 BTC = $2,000.

Step 4: Considering Other Factors

  • Trading Fees: Bybit charges trading fees that are based on your trading volume and VIP level. These fees must be deducted from your profit calculation.
  • Funding Fees: For perpetual contracts, Bybit charges a funding fee that represents the interest rate differential between the contract and the underlying asset. This fee must also be considered in your profit calculation.
  • Leverage: Using leverage amplifies your potential profit, but it also increases your potential losses. Calculate your profit carefully, taking into account the leverage level used.

Step 5: Understanding Liquidation

  • Trigger Point: Liquidation occurs when the equity in your account falls below a certain level.
  • Consequence: Liquidation results in the automatic closing of your contract, and you may incur losses greater than your initial margin.
  • Monitor: Regularly monitor your unrealized PnL to avoid liquidation.

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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