Binance, Exchanges

How Are Binance Futures Profits Calculated?

Binance Futures is a cryptocurrency futures trading platform launched by Binance in September 2019. The platform offers a wide range of futures contracts with leverage up to 125x.

Binance Futures uses the same engine as Binance Spot and is fully integrated with the Binance ecosystem.

Binance Futures uses a Mark Price mechanism to calculate settlements, which is different from most other exchanges that use Last Price. The Mark Price is the average price of a contract during the settlement period and is used to determine whether a trader has made a profit or loss on their position.

When a position is closed, the profit or loss is calculated using the following formula:

Profit/Loss = (Exit Price – Entry Price) x Leverage x Contract Value

The Exit Price is the price at which the position is sold and the Entry Price is the price at which the position was bought. The Leverage is the amount of leverage used on the trade and the Contract Value is the value of each contract.

For example, let’s say you buy 1 contract of BTC/USDT at 10,000 with 100x leverage and sell it at 10,500. Your profit would be:

Profit/Loss = (10,500 – 10,000) x 100 x 1 = 500 USDT

If you had used 50x leverage then your profit would have been:

Profit/Loss = (10,500 – 10,000) x 50 x 1 = 250 USDT

Similarly, if you had used 125x leverage then your profit would have been:

Profit/Loss = (10,500 – 10,000) x 125 x 1 = 625 USDT.

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