For traders, it's important to know how to calculate profit and loss before placing an order. Bybit supports USDT Options and USDC Options. P&L for USDT Options will be settled in USDT while P&L for USDTC Options will be settled in USDC.
Here's a guide to help you better understand the relationship between different variables and profit & loss calculations. The calculation below will use USDT Options as an illustration.
Average Entry Price
When traders place new orders for the existing Options contract, the entry price will change accordingly.
Formula
Position Average Price = [(Last Position Quantity × Last Position Average Price) + (Traded Quantity × Traded Price)]/(Last Position Quantity + Traded Quantity)
Example
Ann holds a 0.1 of BTC BTCUSDT-31DEC21-48000-C, with an entry price of $3,500. She believes that the price of BTC will continue to rise in the near future. Ann decides to increase her call options, and opens a new call option of 0.1 BTC at the entry price of $4,000.
Average Entry Price = [(0.1 × 3,500) + (0.1 × 4,000)]/(0.1 + 0.1) = $3,750
Unrealized P&L
Unrealized P&L (UPL) is the current profit or loss of open positions. Based on the direction of your position — long or short — the formula used to calculate the unrealized profit and loss will be different.
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Buy Option |
Sell Option | |
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Description |
For traders who believe that the underlying asset's price will rise in the future, they can choose to buy call or sell put options. |
For traders who think that the underlying asset's price will drop in the future, they can choose to buy put or sell call options. |
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Formula |
UPL = (Mark Price − Average Entry Price) × Position Quantity |
UPL = (Average Entry Price − Mark Price) × Position Quantity |
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Example |
Ann buys a 0.1 of BTC BTCUSDT-31DEC21-48000-C, with an entry price of $3,500. The price of BTC rises, and when the Mark price reaches $4,500, the unrealized P&L of the option she holds is [(4,500 − 3,500) × 0.1] = 100 USDT. |
Bob sells a 0.3 of BTC BTCUSDT-31DEC21-50000-C with an average entry price of $2,600. The price of BTC rises, and when the mark price reaches $2,800, the unrealized P&L of the option he holds is [(2,600 − 2,800) × 0.3] = −60 USDT. |
Note: All Options contracts are settled in USDT.
ROI
ROI shows the percentage return on investment for each position.
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Buy Option |
Sell Option | |
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Formula (Cross Margin Mode) |
（Mark Price - Average Entry Price）/ Average Entry Price |
（Average Entry Price - Mark Price）/ Average Entry Price |
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Examples under Cross Margin Mode |
Sally buys a 0.1 of BTC BTCUSDT-23NOV23-36000-C, with an entry price of $4,700. The price of BTC rises, and when the Mark price reaches $4,900, the unrealized P&L of the option she holds is [(4,900 − 4,700) × 0.1] = 20 USDT. ROI = 20 / 4700 = 0.43% |
Bob sells a 0.1 of BTC BTCUSDT-23NOV23-36000-P, with an entry price of $4,700. The price of BTC rises, and when the Mark price reaches $4,900, the unrealized P&L of the option she holds is [(4,700 - 4,900) × 0.1] = -20 USDT. ROI = -20 / 4700 = -0.43% |
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Formula (Portfolio Margin Mode) |
The calculation of options' ROI within the portfolio margin takes into account the underlying asset as a whole. ROI = Unrealized P&L of Derivatives on Underlying Assets/Initial Margin of Underlying Assets | |
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Delivery ROI |
(Delivery Cash Flow - Average Entry Price * Quantity - Fee to Open - Delivery Fee) / (Average Entry Price * Quantity) |
(Delivery Cash Flow + Average Entry Price * Quantity - Fee to Open - Delivery Fee) / (Average Entry Price * Quantity) |
Closed P&L
Closed P&L is the profit and loss that occurs when the trader closes the position.
Formula
Closed P&L for Buy Call/ Put = (Traded Price − Position Average Price) × Traded Quantity − Trading Fees (open and closed position)
Closed P&L for Sell Call/ Put = (Position Average Price − Traded Price) × Traded Quantity − Trading Fees (open and closed position)
Example
Sell Call: The BTC index price is $44,900. Bob sells a 0.3 of BTC BTCUSDT-31DEC21-50000-C, with an average entry price of $2,600. When the price of BTC drops to $44,000, he closes the position early at a mark price of $2,400.
The Closed P&L of the option is 52 USDT, based on the following calculation:
[(2,600 − 2,400) × 0.3] − 44,900 × 0.3 × 0.03% − 44,000 × 0.3 × 0.03%.
Delivery P&L
This is generated when the Option expires.
Formula
Delivered RPL for Call Option = Maximum (Delivery Price − Strike Price, 0) × Position Quantity + Premium (receive or pay) − Delivery Fee − Trading Fee (open position)
Delivered RPL for Put Option = Maximum (Strike Price − Delivery Price, 0) × Position Quantity + Premium (receive or pay) − Delivery Fee − Trading Fee (open position)
Example
Buy Call:
The BTC index price is $44,900. Ann buys a 0.1 of BTC BTCUSDT-31DEC21-48000-C, with an entry price of $3,500. When the contract expires, the BTC delivery price is $52,000. It's traded at a strike price of $48,000. The delivery P&L of the option is 47.873 USDT, based on the following calculation:
Maximum (52,000 − 48,000, 0) × 0.1 − 3,500 × 0.1 − 44,900 × 0.1 × 0.03% − 52,000 × 0.1 × 0.015%
Let's revisit Ann's case, in which the BTC index price is $44,900. Ann holds a 0.1 of BTC BTCUSDT-31DEC21-48000-C, with an entry price of $3,500. The delivery P&L of the option is 400 USDT.
- Trading Fee = Minimum (0.03% × 44,900, 12.5% × 3,500) × 0.1 = 1.347 USDT
Note: Trading fee for a single contract can never be higher than 12.5% of the option price.
Let's suppose that the estimated delivery price is $49,000 when the contract is about to expire.
- Delivery Fee = Minimum [(0.015% × 49,000, 12.5% × (49,000 − 48,000)] × 0.1= 0.735 USDT
As an option buyer, Ann needs to pay a premium to the seller to obtain the right to the call option.
Formula:
Premium = Traded Quantity × Traded Price
- 0.1 × 3,500 = 350 USDT
Delivery P&L = 400 − 1.347 − 0.735 − 350 = 47.918 USDT
Closed P&L and Delivery P&L are different from Unrealized P&L and Realized P&L. It's worth noting that Delivery P&L also takes premium into account. Please refer to the following table for details:
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Unrealized P&L |
Closed P&L Realized P&L |
Delivery P&L |
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Position P&L |
YES |
YES |
YES |
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Trading Fees |
NO |
YES |
YES |
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Delivery Fee |
NO |
NO |
YES |
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Premium |
NO |
NO |
YES |
Realized P&L
Realized P&L is the profit and loss that occurs when the trader closes the position early. Please note that the Realized P&L in the position zone represents the total profit and loss of the position since the position has been held.
Formula
Realized P&L = Sum (Profit and loss on closed positions) − Trading Fees (open and closed positions)
Example
Let's see how the Realized P&L displayed in the position zone changes in different scenarios.
Scenario 1: Bob buys 0.4 of BTC BTCUSDT-31DEC21-50000-C when the Option mark price is $2,400 and the BTC index price is $44,000.
Trading Fee (open position) = 44,000 × 0.4 × 0.03% = 5.28 USDT
In this case, the Realized P&L of Bob's position is −5.28 USDT.
Scenario 2: The BTC index price rises to $44,900. Bob sells a 0.3 of BTC BTCUSDT-31DEC21-50000-C, with an average entry price of $2,400. He closes the position at a mark price of $2,600.
Realized P&L (before) = - 5.28 USDT
Trading Fee (closed position) = 44,900 × 0.3 × 0.03% = 4.041 USDT
Realized P&L = [(2,600 − 2,400) × 0.3] − 44,900 × 0.3 × 0.03% - 5.28 = 50.68 USDT
Scenario 3: Now Bob only holds 0.1 of BTC BTCUSDT-31DEC21-50000-C. Then, when the BTC index price is $45,000, he buys 0.2 of BTC BTCUSDT-31DEC21-50000-C at $2,500.
Realized P&L (before) = 50.68 USDT
Trading Fee (open position) = 45,000 × 0.2 × 0.03% = 2.7 USDT
Realized P&L (before) = 50.68 − 2.7 = 47.98 USDT
For more detailed information about option fees, please refer to Bybit Option Fees Explained.