Calculation of option's profit and loss

Published on Jun 20, 2022Updated on May 17, 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:

iii-calculation-of-option-profit-and-loss image 1
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.

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:

iii-calculation-of-option-profit-and-loss image 2
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:

iii-calculation-of-option-profit-and-loss image 3
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.
Margin (Balance)
Initial margin + manually added or removed margin
Margin Ratio
Margin balance / (maintenance margin + liquidation fee)