Academy Beginners Tutorial Article

Futures Account: Profit & Loss

2020.03.10

A. What is Futures Account?

Under cross-margin mode:

Every user has a futures account to manage all the funds involved in futures trading. Under the futures trading page, you will be able to see the account details at the top bar:

Funds can be freely transferred between “Spot Account” and “Futures Account”. However, if you have holding positions of futures contract, a certain amount in your futures account will be kept on hold as margin, which cannot be withdrawn before delivery. For example, your equity balance is 10 BTC and the margin for your contracts is 2BTC. The amount you will be able to move will be 8 BTC. The realized profit and loss also cannot be transferred out of the futures account before delivery / settlement.

Futures account consists of equity, deposit, RPL and UPL.

Equity = deposits + RPL + UPL. It equals to all the assets in your account.

Balance: margin of your futures account, it is also the amount transferred from your spot account. After settlement, your RPL will be added to your balance.

RPL: realized profit and loss. The profit / loss generated by closing a position before delivery or settlement.

UPL: unrealized profit and loss. The profit / loss generated by a position that has yet to be closed.

Margin: the collateral required for holding all current positions. The required margin varies according to the price and number of positions held.

Under fixed-margin mode:

Funds are segregated into “sub accounts” for each contract (weekly, bi-weekly , quarterly) under this mode. Each sub account consists of deposit, RPL, amount on hold and UPL.

Funds can be freely transferred between “Futures Account” and “Spot Account”. But the funds in the sub accounts can only be transferred out after all the holding positions of the contract are closed. While RPL can only be transferred out after settlement / delivery.

Deposit (Account): margin of the futures account for all holding positions

Deposit (Sub account): margin for the futures contract (weekly / bi-weekly / quarterly/bi-quarterly). Together with RPL, they act as the Collateral OCC.

Available amount of a contract: also the margin available for opening new position(s)

RPL: Your gains and losess, from the last settlement till now, that have been realized by closing your position. It can be used as margin for the holding positions and open orders.

On hold: The margin required for open orders of the contract. After the order is filled, the value will be added to the Collateral OCC, which consists of equity and RPL.

Fixed-margin: The margin required for the positions of the contract. The margin will remain the same after opening or closing the positions, but it can be added manually by the user. Select “Transfer” next to “On hold” to transfer funds between “Futures Balance” and “Spot Account”.

The transferable amount in the futures account does not necessarily equal to the balance. Instead, it is computed based on the followings:

1. The average of a contract = contract balance + RPL – fixed margin – on hold amount; But if the average is greater than 0, it will be treated as 0 instead.

2. Initial position margin available = Futures account balance + the sum of the averages of 4 contracts

B. What is holding a position? How to calculate RPL and UPL?

Before contract delivery, users may decide to buy or sell the contact at their own will. User who has bought a contract but have not sold it yet is said to be holding a position.

RPL

RPL is in fact the profit / loss generated after closing position(s).

Total RPL = RPL of weekly contracts + RPL of bi-weekly contracts + RPL of quarterly contracts + RPL of bi-quarterly contracts

RPL of contract:

Long side:
RPL of contract = (contract face value / settlement price – contract face value / avg. closing price) * number of contract closed
E.g. A user opened 2 long BTC positions at settlement price 500 USD/BTC, then closed 1 position at 1000 USD/BTC. The RPL of contract will be = (100 / 500 – 100 / 1000) * 1 = 0.1 BTC

Short side:
RPL of contract = (contract face value / avg. closing price – contract face value / settlement price) * number of contract closed
E.g. A user opened 10 short BTC positions at settlement price 500 USD/BTC, then closed 8 positions at 1000 USD/BTC. The RPL of contract will be = (100 / 1000 – 100 / 500) * 8 = -0.8 BTC

UPL

Total UPL = UPL of weekly contracts + UPL of bi-weekly contracts + UPL of quarterly contracts + UPL of bi-quarterly contracts

Open:
UPL of contract = (contract value / settlement price – contract value / last traded price) * number of contract holding
E.g. A user opened 6 long BTC positions at settlement price 500 USD/BTC, and the last traded price is 600 USD/BTC. The UPL of contract will be (100 / 500 – 100 / 600) * 6 = 2 BTC

Close:
UPL of contract = (contract value / last traded price – contract value / settlement price) * number of contract holding

C. What is calculator?

The calculator is designed to be a handy tool for investors to calculate the profit and loss to help with their trades.

Recommended