How to calculate Upbit contract profits

By understanding entry and exit prices, implementing leverage or accounting for fees, calculating contract profits on Upbit ensures accurate tracking of trading outcomes and enables informed decision-making.

Nov 18, 2024 at 11:47 pm

How to Calculate Upbit Contract Profits

Upbit, one of the largest cryptocurrency exchanges in the world, offers a variety of contract trading options for its users. Contract trading is a form of derivatives trading that allows traders to speculate on the future price of an asset without actually owning the underlying asset. This can be a profitable way to trade, but it is important to understand how to calculate your profits before you start trading.

Step 1: Determine Your Entry and Exit Prices

The first step to calculating your contract profits is to determine your entry and exit prices. Your entry price is the price at which you bought the contract, and your exit price is the price at which you sold the contract. The difference between these two prices is your profit or loss.

For example, let's say you buy a contract for $100 and sell it for $110. Your profit would be $10.

Step 2: Calculate Your Profit or Loss

Once you know your entry and exit prices, you can calculate your profit or loss. To do this, simply subtract your entry price from your exit price. If the result is positive, you have made a profit. If the result is negative, you have lost money.

In the example above, your profit would be $10.

Step 3: Apply Leverage

One of the unique features of contract trading is the ability to use leverage. Leverage allows you to trade with more money than you actually have in your account. This can amplify your profits, but it can also amplify your losses.

When you use leverage, you are essentially borrowing money from the exchange. You will need to pay interest on this loan, and if you lose money, you will be responsible for repaying the loan even if it exceeds your account balance.

The amount of leverage you can use varies depending on the exchange and the asset you are trading. On Upbit, you can use up to 100x leverage on some assets.

Step 4: Factor in Fees

When you trade contracts, you will also need to pay fees. These fees can vary depending on the exchange and the type of contract you are trading. On Upbit, the fees for contract trading are as follows:

• Maker fee: 0.02%
• Taker fee: 0.06%

The maker fee is charged when you place an order that is executed immediately. The taker fee is charged when you place an order that is not executed immediately.

Step 5: Calculate Your Net Profit

Once you have calculated your profit or loss, you need to factor in any fees that you have paid. To do this, simply subtract the fees from your profit or loss.

In the example above, let's say you paid $1 in fees. Your net profit would be $9.

Conclusion

Calculating your contract profits is a simple process that can help you track your trading performance and make informed decisions about your trades. By following the steps outlined in this article, you can ensure that you are accurately calculating your profits and losses.