Profit & Loss Calculator

How profit and loss is calculated

A long result starts with the exit minus the entry. A short result starts with the entry minus the exit. That difference is multiplied by quantity, by the contract multiplier, and by the conversion into account currency. Fixed costs are subtracted once. A per-unit cost, if you type one, is multiplied by quantity and included in that same subtraction.

Opening notional is the entry times quantity times multiplier times conversion. The percentage next to that label is the net result divided by the notional. It is not a return on cash posted as margin, and it is not a return on the rest of an account.

Understanding gross and net results

The gross result is the price difference after any adverse slippage you typed. The net result subtracts the trading costs. A trade can be ahead on price and behind once commissions, financing or a conversion fee are included. If you already typed executable bid and ask prices, leave the spread line at zero so that spread is not counted twice.

Understanding percentage returns

Return on opening notional answers a narrow question: net result as a share of the entry value used in the formula. Return on margin uses only the cash amount you type as margin. Return on leverage divides that same notional by a leverage figure you type, then divides the net result by the result. None of the three is a return on account equity, and none is fetched from a broker.

A worked example

Five shares bought at 10 and sold at 12, with a multiplier of 1, a conversion of 1 and a round-trip fee of 2, produce a gross profit of 10 and a net profit of 8. Opening notional is 50. The net return on that notional is 16%. The break-even exit is 10.40, because 0.40 times 5 covers the fee of 2.

Common mistakes

• Leaving transaction costs at zero when a commission applies.
• Using a share multiplier of 1 on a futures contract, or the reverse.
• Ignoring a conversion when the price currency and the account currency differ.
• Reading a higher exit as a profit on a short position.
• Treating a notional percentage on a leveraged product as the return on cash posted.
• Adding a spread on top of entry and exit prices that already include the bid and the ask.
• Reading an option premium result as the payoff of the underlying at expiration.

Limitations

Mark a long or short position from the entry and the exit you type. The workspace separates the price result from the costs you enter, states the return on opening notional, and lets you inspect other exits and sizes before you apply them to the form.

How the calculation works

A long gross result is the exit minus the entry, times quantity, times the multiplier, times the conversion into account currency. A short gross result swaps the two prices. Adverse slippage, if you type it, is removed from the favourable move before that multiplication. Fixed round-trip costs are subtracted once. A per-unit cost is multiplied by quantity and added to those fixed costs. Leave the per-unit field at zero when the round-trip total already includes it. Opening notional is entry times quantity times multiplier times conversion. The notional return is the net result divided by that notional when the notional is above zero. A return on margin is calculated only from cash you type. If you type a leverage figure, that return divides the net result by the notional divided by the figure. Break-even for a long position is the entry plus slippage plus costs divided by quantity times multiplier times conversion. A short position subtracts that offset. When both a tick size and a tick value are entered, the tick value must equal the multiplier times the tick size, and the executable break-even is the next tick in the adverse direction. Prices, fees and the conversion are numbers you supply.

Assumptions

• Entry and exit are prices of the same instrument.
• A share or ETF multiplier is 1 unless you change it.
• A futures multiplier is the point value you type. The page does not insert an exchange specification.
• Forex quantity is base-currency units, and the conversion is account currency per one unit of the quote currency.
• An option on this page is a premium in and a premium out. Expiration payoff is a different calculator.
• A spread is not added again when the entry and exit are already executable prices.
• Financing and borrow costs are included only when you type them.

A worked example

Five shares bought at 10 and sold at 12, with a multiplier of 1, a conversion of 1 and a round-trip fee of 2, produce a gross result of 10 and a net result of 8. Opening notional is 50, so the net return on that notional is 16 percent. The break-even exit is 10.40. Two short futures entered at 10 and covered at 9, with a multiplier of 50 and a fee of 4, produce a net result of 96.

Limitations

The calculation uses the prices and costs you type. A live fill can differ. Fees vary by provider. Financing, borrow fees and a conversion that changes between entry and exit are outside the model unless you express them in the fields provided. The percentage on opening notional is not a return on margin, cash invested or account equity. The model is not a forecast and the figures are not a recommendation to buy or sell.

Change one input at a time if a result looks surprising. The arithmetic is only as careful as the numbers you type, and it does not know your broker’s contract size.

Profit & Loss Calculator recalculates as you type. Reset restores the starting figures on that page. Those figures are an illustration of the arithmetic, not a market observation and not a record of anyone’s account. Copy and export repeat the same rounded results. Cash amounts on screen are shown to two decimal places. A conversion, a margin schedule, or a programme rule that you leave blank is not invented. A zero divisor, a stop on the wrong side of an entry, or a target-weight total other than 100 percent produces a written explanation instead of a blank or infinite number.