It's important for traders to understand how to calculate the profit of a grid trading strategy before creating their Futures Grid Bots. This guide can help you better understand the relationship between the different variables and the calculation of Futures Grid Profit and Total P&L.
Let's run an example to see how the four values — Grid Profit, Grid APR, Total P&L and Total APR — are calculated.
Suppose Trader A creates a Futures Grid Bot strategy based on the following parameters:
- Derivatives trading pair: BTCUSDT
- Market price: 20,248.5 USDT
- Upper price: 30,000 USDT
- Lower price: 10,000 USDT
- Number of grids: 5
- Grid mode: Arithmetic
- Leverage: 2x
- Intervals: 4,000 = (30,000 − 10,000)/5
Grid Profit
Grid profits are total profits that are realized from the auto long and short from the current Futures Grid Bot strategy.
Formula
Grid Profit = Interval × Quantity per grid (Long Order) × completed grid trade − Trading Fees
- Trading Fees = [Filled Order Quantity (Long Order) × Trading Fee Rate × Long Price] + [Filled Order Quantity (Short Order) × Trading Fee Rate × Short Price]
Take the Neutral Futures Grid Bot as an example: The system will calculate the price of each grid and place your orders with 2x leverage. When the Futures Grid Bot strategy is successfully activated, the positions will be placed as follows:
|
Long
|
Short
|
|
Quantity (BTC)
|
Price (USDT)
|
Price (USDT)
|
Quantity (BTC)
|
|
0.152
|
18,000
|
22,000
|
–
|
|
0.152
|
14,000
|
26,000
|
0.152
|
|
0.152
|
10,000
|
30,000
|
0.152
|
Note: You can view the quantity of each grid under Positions in the Details page.
When the BTC price hits 18,000 USDT, the long position will be executed, and the short order at 22,000 USDT will be placed above on the next grid. When the price rises to 22,000 USDT, the short order will be executed and subsequently close the long position, and a long order at 18,000 USDT will be placed. That is, a grid trade is completed and makes a profit of 604.656 USDT, based on the following calculation:
Grid Profit = 4,000 × 0.152 × 1 − 3.344 = 604.656 USDT
Trading Fee = (0.152 × 18,000 × 0.055%) + (0.152 × 22,000 × 0.055%) = 3.344 USDT
Notes:
— Trading fee rates (taker fee) used here for non-VIP users only. To learn more about Derivatives trading fees, please refer to Trading Fee Structure.
— The system will adjust the limit of the maximum number of grids according to the price range you set, in order to ensure that the Futures Grid Bot strategy records positive profits (i.e., grid profits > trading fees) under normal market conditions.
Grid APR
The grid APR has been annualized to derive the annual percentage rate (APR) of the grid profit.
Formula
Grid APR = [(Grid profit/Total investment)/Days of running × 365 days] × 100%
Assuming that Trader A's grid bot runs for 24 hours:
Grid APR = [(604.656/10,000)/1 × 365] × 100%
= 22.06%
Note: A Futures Grid Bot that runs less than 24 hours will be considered to run for one day.
Total P&L
Total P&L is the sum of a Futures Grid Bot's closed profit and unrealized profit & loss.
Formula
Total P&L = Closed Profit + Unrealized P&L
- Closed Profit = The sum of position P&L - trading fees +/− Funding Fee
To view Closed Profit, Grid Profit, Unrealized P&L and Realized Funding Rate, please click on Details at the top right of the active Futures Grid Bot column to enter the Details → Status page.
You can select the History column to view Trading Fees.
Revisiting Trader A's case:
Suppose Trader A terminates the Futures Grid Bot with the following details:
Grid Profit: 1,214.66 USDT
Trading Fees (Long & Short): 1.3376 USDT
Funding Fee: 2.5 USDT
Unrealized P&L: −20 USDT
In this case, the total profit and loss is 1,195.8224 USDT, based on the following calculation:
1,214.66 - 1.3376 + 2.5 − 20
Total APR
The total APR has been annualized to derive the annual percentage rate (APR) of the total profit and loss.
Formula
Total APR = [(Total P&L/Total investment)/Days of running × 365 days] × 100%
Let's say that Trader A's grid bot runs for 2 days and 18 hours. Then:
Total APR = [(1,195.8224/10,000)/2 × 365] × 100%
= 21.82%
Note: For example, a Futures Grid Bot that has been running for more than one day but less than two days will be considered to be running for one day.
After the grid strategy is completed, your assets will automatically be credited to your Funding Account.
