For traders navigating the world of perpetual futures contracts, understanding how profits and costs are calculated is essential. Your net gain or loss in contract trading isn't just about price movement—it’s shaped by three key components: trading fees, funding payments, and realized or unrealized P&L. This guide breaks down each element clearly, helping you make informed decisions and accurately assess your trading performance.
Whether you're trading U-margined contracts (settled in stablecoins like USDT) or coin-margined contracts (settled in the underlying cryptocurrency), the formulas vary slightly—but the logic remains consistent. Let’s explore each component in detail.
Trading Fees: Maker vs. Taker Costs
Every trade incurs a fee, but the amount depends on your role in the trade: maker or taker.
Taker Fee: If your order is filled immediately against existing liquidity (market order), you’re a taker.
- Taker Fee Rate: 0.02%
- Fee = Position Value × 0.02%
Maker Fee: If your order adds liquidity to the order book (limit order that doesn’t fill immediately), you’re a maker.
- Maker Fee Rate: 0.00% (common on many exchanges)
- Fee = Position Value × 0.00% = $0
👉 Discover how low trading fees can boost your long-term returns with efficient order strategies.
For example, opening a $5,000 BTC/USDT position as a taker would cost:
$5,000 × 0.02% = **$1.00**
Closing as a maker? No fee. This incentivizes limit orders and improves market depth.
Funding Payments: Earnings or Costs Every 8 Hours
Perpetual contracts use funding rates to keep the contract price aligned with the spot market. These are settled every 8 hours, and payments flow directly between traders—no exchange profit involved.
Who Pays and Who Gets Paid?
- Long positions (buyers) pay funding when the rate is positive.
- Short positions (sellers) pay when the rate is negative.
- If the rate is negative, longs receive from shorts.
- If positive, shorts receive from longs.
Funding Payment Formula
Funding Payment = Funding Rate × Position Value
Position Value = Number of Contracts × Face Value × Mark Price at Settlement
Example:
You hold a $10,000 BTC/USDT long position. Funding rate = -0.025%
Since the rate is negative, longs receive funding:
$10,000 × (-0.025%) = **+$2.50**
You earn $2.50 every 8 hours as long as the rate stays negative—passive income just for holding.
Profit and Loss Calculation
Your profit comes from price changes, but must be adjusted for fees and funding. There are two types of P&L:
3.1 Unrealized P&L (Floating Profit/Loss)
This reflects your current gain or loss while the position is still open.
U-Margined Contracts (e.g., BTC/USDT)
- Long Position: (Mark Price – Entry Price) × Quantity
- Short Position: (Entry Price – Mark Price) × Quantity
Coin-Margined Contracts (e.g., BTC/USD)
These are inverse contracts, so calculations use reciprocal pricing:
- Long Position: (1 / Entry Price – 1 / Mark Price) × Quantity
- Short Position: (1 / Mark Price – 1 / Entry Price) × Quantity
3.2 Realized P&L (Closed Position Profit)
This is your actual profit after closing a trade.
U-Margined Contracts
- Long: (Exit Price – Entry Price) × Quantity
- Short: (Entry Price – Exit Price) × Quantity
Coin-Margined Contracts
- Long: (1 / Entry Price – 1 / Exit Price) × Quantity
- Short: (1 / Exit Price – 1 / Entry Price) × Quantity
Practical Example: Step-by-Step Calculation
Let’s walk through a real scenario:
- Trader opens a BTC/USDT long position as a taker.
- Buys 0.1 BTC at $50,000 per BTC.
- Leverage: 10×, Margin: $500
- Taker Fee: 0.02%, Maker Fee: 0.00%
- Funding Rate: –0.025%
- Later closes at $60,000 as a maker.
Step 1: Opening Fee
Position Value = $50,000 × 0.1 = $5,000
Taker Fee = $5,000 × 0.02% = **$1.00**
Step 2: Funding Received
Funding Payment = $5,000 × (–0.025%) = **+$1.25**
(Since rate is negative, longs receive)
Step 3: Realized P&L
Exit at $60,000 → Profit per BTC = $10,000
P&L = ($60,000 – $50,000) × 0.1 = $1,000
Step 4: Closing Fee
Sells as maker → Fee = $6,000 × 0.1 × 0.00% = **$0**
Final Net Profit
= Realized P&L – Opening Fee + Funding Received – Closing Fee
= $1,000 – $1 + $1.25 – $0 = $1,001.25
👉 See how small cost savings on fees and funding can compound into big gains over time.
Frequently Asked Questions (FAQ)
Q1: What’s the difference between unrealized and realized P&L?
Unrealized P&L shows your current profit or loss while the position is open, based on the mark price. Realized P&L is locked in once you close the position—it’s your actual gain or loss after execution.
Q2: Do I always pay funding fees?
No. Funding direction depends on the funding rate and your position type. Longs pay when the rate is positive; they earn when it’s negative. Shorts pay when it’s negative and earn when positive.
Q3: Why are maker fees often lower than taker fees?
Exchanges reward makers because they add liquidity to the order book, improving market efficiency and depth. Takers remove liquidity, so they pay a small premium.
Q4: How does leverage affect my profit calculation?
Leverage magnifies both gains and losses—but it doesn’t change the base P&L formula. A 10× leveraged trade multiplies your exposure, so a 1% price move becomes a 10% P&L change (before fees).
Q5: Can I avoid trading fees completely?
Yes—by using limit orders that don’t immediately fill (maker orders), many platforms offer zero maker fees. This strategy reduces costs over time, especially for active traders.
Q6: Where can I check my funding payment history?
Most exchanges provide a “Funding History” section in your derivatives account dashboard. You can view every payment received or paid, along with timestamps and rates.
Key Takeaways for Smart Contract Trading
Understanding how your profits are calculated gives you full control over your trading strategy. Remember:
- Minimize fees by using limit orders where possible.
- Monitor funding rates—negative rates can turn long positions into income-generating assets.
- Track both realized and unrealized P&L to evaluate performance accurately.
- Always account for all cost components: fees, funding, slippage.
By mastering these fundamentals, you’re not just trading—you’re building a data-driven approach that supports sustainable growth in the dynamic world of crypto derivatives.
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