How it works
Gross PnL is the price move times the quantity. Net PnL is what reaches your wallet after the exchange takes a fee when you open and again when you close, and after funding paid or received while you held the position.
ROE (return on equity) compares net PnL with the margin you posted, so it scales with leverage. A 2% move at 10x is roughly a 20% ROE before costs, and costs scale with leverage too.
Formulas
- Gross PnL (long) = (Exit − Entry) × Qty; short = (Entry − Exit) × Qty
- Fees = (Entry × Qty × entry fee) + (Exit × Qty × exit fee)
- Funding = Notional × rate × number of funding periods (longs pay when the rate is positive)
- ROE = Net PnL ÷ (Entry × Qty ÷ Leverage)
Questions traders ask
Should I use maker or taker fee?
Use taker for market orders and stop orders that fill instantly. Use maker for limit orders that rest on the book. Many traders enter with a limit (maker) and exit on a stop (taker).
Why is ROE so much larger than the price move?
ROE is measured against margin, and margin is the notional divided by leverage. The same dollar result looks larger when less margin is posted.