If you’re trading, it's essential to understand how your profit or loss is calculated in each operation. It may seem complicated at first, but with these formulas and a clear example, you’ll get it in no time.
Basic formulas you should know
If you open a buy position (long trade)
Use this formula:
PL = S × M × (Ec / E0 – 1) – C
Where:
PL = profit or loss
S = your investment amount
M = multiplier (leverage)
Ec = closing price
E0 = opening price
C = commission for the trade
If you open a sell position (short trade)
Use this formula:
PL = S × M × (1 – Ec / E0) – C
How to calculate the final value of the operation
Once the trade is closed, calculate the total value of your investment with:
V = S + PL
Where:
V = final value of your trade
PL = profit or loss
S = your initial investment
When is a trade automatically closed?
If the value (V) of your trade reaches zero, the platform will automatically close your position. This is done under the "Profit and Loss Calculation" section of our Trading Policy.
Example: Long trade (Buy)
Let’s say you open a long position on the Dow Jones with the following details:
Investment: 1,000 USD
Multiplier: 10
Opening price: 15,345
Closing price: 15,515
Commission: 1.70 USD
Rollover fee: -3.80 USD
Apply the formula:
📌
PL = 1,000 × 10 × (15,515 / 15,345 – 1) – 1.70 – 3.80
PL = 105.28 USD
Your profit for this trade would be 105.28 USD.
Example: Short trade (Sell)
Now let’s say you make the same trade, but you open a short position:
📌
PL = 1,000 × 10 × (1 – 15,515 / 15,345) – 1.70 – 0.20
PL = -112.68 USD
In this case, your loss would be 112.68 USD.
Summary
Use a different formula depending on whether you’re buying or selling.
Always subtract commission and rollover fees.
Keep an eye on your multiplier, as it can amplify both profit and loss.
If your trade's value hits zero, the system will automatically close it.