Calculation of option's profit and loss
Published on Jun 20, 2022Updated on Apr 9, 20244 min read
1. Single-currency margin: cross margin
In single-currency margin mode: cross margin, the system only allows users to open short positions of options. To open long positions under single-currency margin mode, please choose isolated margin and refer to 3. Single/Multi-currency/Portfolio margin: Isolated Margin in this article
The options positions are shown in the following:
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Term
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Definition
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Total
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The total of long positions is a positive number, and the total of short positions is a negative number.
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Options value
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Options value = total positions * mark price * contact multiplier * contract value
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P&L
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Unrealized profit or loss of current position P&L = (mark price - avg. open price) * total positions * contract multiplier * contract value
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P&L ratio
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P&L of long positions = (mark price – avg. open price) / avg. open price
P&L of short positions = (avg. open price - mark price) / avg. open price
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Initial margin
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The initial margin for long positions is 0. As to initial margin of short positions, please refer to Introduction to the calculation of options margin.
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Maintenance margin
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The maintenance margin for long positions is 0. As to maintenance margin of short positions, please refer to Introduction to the calculation of options margin.
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2. Multi-currency margin mode: cross margin
Under the multi-currency margin mode: cross margin, the system only allows users to open short positions of options. To open long positions under multi-currency margin mode, please choose isolated margin and refer to 3. Single/Multi-currency/Portfolio margin: Isolated Margin in this article
The options positions are shown in the following:
|
Term
|
Definition
|
|
Total
|
The total of long positions is a positive number, and the total of short positions is a negative number.
|
|
Options value
|
Options value = total positions * mark price * contact multiplier * contract value
|
|
P&L
|
Unrealized profit or loss of current position P&L = (mark price - avg. open price) * total positions * contract multiplier * contract value
|
|
P&L ratio
|
P&L of long positions = (mark price – avg. open price) / avg. open price
P&L of short positions = (avg. open price - mark price) / avg. open price
|
|
Initial margin
|
The initial margin for long positions is 0. As to initial margin of short positions, please refer to Introduction to the calculation of options margin.
|
|
Maintenance margin
|
The maintenance margin for long positions is 0. As to maintenance margin of short positions, please refer to Introduction to the calculation of options margin.
|
3. The isolated mode of Single/multi-currency/Portfolio margin
In isolated margin mode, the system allows users to open both long and short options positions. The isolated options positions are shown as follows:
|
Term
|
Definition
|
|
Total
|
The total of long positions is a positive number, and the total of short positions is a negative number.
|
|
Options value
|
Options value = total positions * mark price * contact multiplier * contract value
|
|
P&L
|
Unrealized profit or loss of current position P&L = (mark price - avg. open price) * total positions * contract multiplier * contract value
|
|
P&L ratio
|
P&L of long positions = (mark price – avg. open price) / avg. open price
P&L of short positions = (avg. open price - mark price) / avg. open price
|
|
Initial margin
|
The initial margin for long positions is 0. As to initial margin of short positions, please refer to Introduction to the calculation of options margin.
|
|
Maintenance margin
|
The maintenance margin for long positions is 0. As to maintenance margin of short positions, please refer to Introduction to the calculation of options margin.
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Margin (Balance)
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Initial margin + manually added or removed margin
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Margin Ratio
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Margin balance / (maintenance margin + liquidation fee)
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