How to calculate profit from full margin in currency circle

Calculation of margin profit for cross-margin positions in the currency circle: formula: profit = (change rate of underlying asset price × leverage × margin) - Example of handling fee: 5 times leverage, margin 1000 USDT, underlying asset price rises by 10%, handling fee is 0.1%, The return is 499.9 USDT. Cross-margin trading is high risk, and losses may be magnified by leverage. Traders should carefully evaluate the impact of leverage, price fluctuations and handling fees. Circle margin trading is a leveraged trading method that allows traders to use funds to trade with higher leverage. In this mode, the income is calculated as follows:

Calculation formula:

Yield = (Underlying asset price change rate Leverage

Margin) - Handling fee

Decomposition explanation:

Underlying asset price change rate : refers to the price change range of the underlying asset during the transaction period. For example, if the underlying asset price increases by 10%, the price change rate is 0.1.

Leverage: refers to the multiple between the amount of funds a trader borrows and the actual margin invested. For example, 5x leverage means the trader borrows 5x the margin to trade.

• Margin: refers to the actual funds invested by traders as collateral to obtain leveraged funds.
• Handling fee: refers to the transaction fee charged by the trading platform.
• Example:
• Suppose a trader conducts a full margin trade with 5x leverage, the margin is 1000 USDT, the price of the underlying asset increases by 10%, and the handling fee is 0.1%. Calculate the profit as follows:

Profit = (0.1

5 1000) - 0.1% * 1000Profit = 499.9 USDT

Therefore, the trader’s profit is 499.9 USDT.

Note:

Cross margin trading carries a high level of risk as losses may amplify the leverage.

Properly calculating returns is crucial to understanding the potential rewards and risks of trading.

Traders should carefully consider the impact of leverage, underlying asset price fluctuations and handling fees, and make informed trading decisions based on their own risk tolerance.

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