BitMEX

How to Calculate the BitMEX Profit

If you’re currently taking your very first steps as a crypto investor or trader, then there’s a good chance you may already be looking at BitMEX, one of the most popular Bitcoin trading platforms. Its daily trading volume is of over 35,000 BTC, and it has over 540,000 accesses monthly. Without a doubt, BitMEX is an impressive platform that boasts a plethora of useful trading tools.

Perpetual contracts, upside profit and downside profit contracts, funding fees, trading fees,  unrealized and realized PNL (Profit and Loss), all these terms might be troublesome for you at first. Before trading efficiently on BitMEX, it’s imperative that you understand what they mean because only by understanding them you will be able to learn to calculate your profits on the said platform.

Bitmex has a built-in profit/loss calculator which can be used with relative ease if you have a bit of patience to learn what it’s all about. We have created a quick walk-through of the BitMEX calculator to help you get to know your way around a bit better.

The Profit/Loss Calculator

The calculator can be accessed from the upper left part of BitMEX’s interface, within the Place Order section. To access it, click the calculator-shaped button from the menu’s upper right side, right next to the Settings button.

The calculator has two main “sides,” long and short, and three tabs: Profit/Loss, Target Price, and Liquidation Price. Underneath, you can find the designated fields for entering the Quantity, the Entry Price, the Exit Price, and the Leverage. The results are automatically displayed on the right side of the calculator’s compact UI in sections such as Margin, Entry Value, Exit Value, Profit/Loss, Profit/Loss%, and ROE%.

Buying and Selling Explained

To further explain how the BitMEX Profit/Loss calculator works, we are going to use actual examples of Perpetual Contracts, Upside Profit Contracts, and Downside Profit Contracts.

Perpetual Contracts

Let us imagine you long for 1,000 XBTUSD contracts with an average entry price of $1,000. If the XBTUSD mark price is currently $1,250, then the unrealized PNL (Profit and Loss) is based on the difference between the average entry price and the mark price.

The unrealized profit is calculated as follows: ($1/$1,000 – $1/$1,250) * 1,000 = 0.20 XBT

The realized PNL is based on the difference between the average entry price and the price at which you sell XTBUSD. Realized PNL is calculated in regards to where you can buy or sell your position. Most of the time, this is isn’t the mark price.

It’s calculated using the following formula: ($1/1,000 – $1/$1,500) * 500 = 0.17 XBT, where 1500 is the last price of XBTUSD, and 500 is the number of contracts you sold.

Upside Profit Contract

You want buy 100 XBT7D_U110 contracts with an average entry price of 0.03 XBT. The last currently known price of XTB7D_U110 is 0.05 XBT.

In this case, the unrealized PNL is represented by the difference between the last price and the average entry price. It’s calculated as follows: (0.05 XBT – 0.03 XBT) * 100 = 2 XBT.

The realized PNL is represented by the difference between the price at which you decide to sell XBT7D_U110 and the average price entry. For example, if you decide to sell 50 XBT7D_U110 contracts at 0.05 XBR then the formula will be (0.05 XBT – 0.03 XBT) * 50 = 1 XBT

Downside Profit Contract

For the sake of this example, imagine that you want to buy 50 XBT7D_D90 contracts with an average price of 0.02 XBT, while also keeping in mind that the last price of XBT7D_D90 is currently 0.04 XBT.

The unrealized PNL is represented by the difference between the last price and the average entry price, and it’s calculated as follows: (0.04 XBT – 0.02 XBT) * 50 = 1 XBT

The realized PNL is represented by the difference between the average entry price and the price at which you sell XBT7D_D90. If you are to sell 25 XBT7D_D90 at 0.04 XBT, then the realized profit will be (0.04 XBT – 0.02 XBT) * 25 = 0.5 XBT

Funding Fees

BitMEX comes with support for the so-called Perpetual Contracts. If you are to buy or to sell a perpetual contract, you will either pay or receive funding fees occasionally during the trading period.

A Perpetual Contract is fairly similar to a Futures Contract.  However, it differentiates itself from the aforementioned contract by having the following particularities: there is not expiry or settlement involved, it can trade very closely to the Index Price since it can mimic a margin-based spot market. More information about Perpetual Contracts and Future Contracts can be found on BitMEX’s official website

Let’s say you are trading XBTUSD and that every 8 hours, there is a funding fee which is currently worth 1%. The funding fee is paid from buyers to sellers. For example, let’s imagine that you currently long for 100 XBT worth of XBTUSD. If the position has no realized PNL and it is funding time, then you are required to pay 1 XBT. After the funding fee has been paid, your realized PNL is now -1 XBT.

Trading Fees

The realized PNL is used to calculate all the necessary trading fees. For example, if you were to buy XBTUSD and the market would remain the same, then your unrealized PNL is 0, and the realized PNL is negative because you paid a take fee when you purchased XBTUSD.

Realized PNL Accounting

If you are reducing the size of an existing position or if you are closing it altogether, then the realized PNL will be displayed automatically on the BitMEX trading dashboard.

For example, for an open position with a realized profit of 10 XBT, the Open Positions tab will display this amount. It’s the exact opposite if you close the same position and realize a profit of 10 XBT. Then the 10 XBT will be displayed on the Closed Positions tab.

If you create a new position on the contract in question, then the realized PNL will be 0 XBT and it will be displayed on the Open Positions tab. Conversely, if you close the position, any realized PNL will be then added to the Closed Position Tab.

We hope that this guide shed some light on what might seem a fairly troublesome calculator and that calculating your BitMEX profits will from now on be a breeze.

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