Understanding Crypto Futures Profit Formulas
- Long Position Profit = Contract Face Value × Position Size / Entry Price - Contract Face Value × Position Size / Exit Price
- Short Position Profit = Contract Face Value × Position Size / Exit Price - Contract Face Value × Position Size / Entry Price
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Key Insight:
Calculated profits follow a logical structure—pre-settlement gains + post-settlement gains for settled positions, while unsettled positions use the direct formula above.
Case Study 1: Unsettled Position Calculation
Scenario:
- Entry Price: 0.233
- Exit Price: 0.2361
- Position Size: 1 contract
Calculation:
Long Profit = (10/0.233 - 10/0.2361) × 1 = 0.5635 XRP
Takeaway:
For active trades, apply the base formula directly without settlement adjustments.
Case Study 2: Position with Prior Settlement
Scenario:
- Settlement Reference Price (Sept 26): 0.2447
- Entry Price: 0.237
- Exit Price: 0.2435
Calculations:
- Displayed Profit (using settlement price):
(10/0.2447 - 10/0.2435) × 1 = -0.2208 - Actual Profit (using original entry):
(10/0.237 - 10/0.2435) × 1 = +1.1263
Key Insight:
Settled positions use the reference price for display, but true profitability reflects the original entry.
Case Study 3: Position Settled + Added Contracts
Scenario:
- First Entry: 0.28 (settled at 0.276)
- Second Entry: 0.2741
- Total Contracts: 2
- Exit Price: 0.2567
Calculations:
- Adjusted Settlement Benchmark: 0.275
- Displayed Profit:
(10/0.275 - 10/0.2567) × 2 = -5.1847 - Actual Profit:
(10/0.277 - 10/0.2567) × 2 = -5.7098
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Takeaway:
Adding contracts post-settlement requires recalculating the benchmark price for accurate tracking.
FAQs: Crypto Futures Profitability
Q1: Why do settled positions show different profits?
A: Exchanges use settlement prices as reference points, which may differ from your entry price until final exit.
Q2: How does leverage affect these calculations?
A: Leverage impacts margin requirements but not the core profit formula—gains/losses are magnified proportionally.
Q3: Can profits be negative even if the price moves favorably?
A: Yes, if post-settlement prices fluctuate before exit or additional contracts alter the cost basis.
Q4: What’s the best strategy for multi-contract positions?
A: Track each entry separately and use weighted averages for holistic profit assessment.
Key Takeaways
- Formulas are universal—apply them based on position type (long/short).
- Settlement resets reference prices—monitor benchmarks for accurate profit tracking.
- Multi-contract trades add complexity—always recalculate margins and cost bases.
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Note: Trading involves risks. Past performance doesn’t guarantee future results. Conduct independent research or consult financial experts.