How to calculate leverage income of Ethereum contract?

Regarding Ethereum leverage trading, it is a relatively familiar investment method for veterans in the currency circle, but many novice investors still don’t know how to calculate the leverage income of Ethereum contracts? When trading Ethereum with leverage, novice investors need to provide an initial margin, which is the capital in the trade. Initial margin is usually a small percentage of the value of a leveraged position, usually expressed as a percentage. The leverage ratio indicates the size of the leverage position relative to the initial margin. So how to calculate the profit is actually very simple. You just need to remember the formula. Profit = (market price change/entry price) * contract value * contract quantity. Next, the editor will explain it in detail.

How to calculate the leverage income of Ethereum contract?

Calculating the leverage return of an Ethereum contract is a complex process that requires consideration of multiple factors such as initial margin, leverage multiples, and market price fluctuations. The calculation of leverage returns involves the complex interaction between these factors, including the choice of trading direction (long or short). The calculation of profit and loss is based on changes in market prices and the relationship between leveraged positions and initial margin. By considering these factors together, the risks and potential rewards of leveraged trading can be more accurately assessed.

Profit = (market price change/entry price)*contract value*contract quantity

Loss=-(market price change/entry price)*contract value*contract quantity

In addition, when executing contract transactions on the Ethereum network, you need to pay a certain transaction fee, called "gas fee". These fees are paid in Ether, and the amount of the gas fee depends on the complexity of the transaction. If investors can write and execute high-frequency, high-value contract transactions, investors may be able to obtain certain profits through transaction fees.

Ethereum contract trading rules:

The Ethereum contract trading rules mainly cover five major aspects: trading time, transaction type, order method, position and order restrictions. These rules are detailed below.

1. Trading hours

Contract trading is open 24 hours a day and is only suspended during the settlement or delivery time period at 16:00 (UTC 8) every Friday. 10 minutes before delivery, only position closing operations can be performed, and positions cannot be opened.

2. Transaction Type

Transaction types are divided into two categories, opening and closing positions. Opening and closing positions are divided into two directions: buying and selling:

Buy and open long (bullish) means that when the user is bullish or bullish on the index, he will newly buy a certain amount of a certain kind of stock. contract. Carry out the "buy and open long" operation, and the long position will be increased after successful matching.

Selling to close long (long position closing) refers to the selling contract that the user covers when he is no longer bullish on the future index market, and offsets the current holding of the buying contract to exit the market. Perform the "sell to close long" operation, and the long position will be reduced after successful matching.

Selling short (bearish) means that when the user is bearish or bearish on the index, he or she will newly sell a certain number of certain contracts. Carry out the "sell and open short" operation, and the short position will be increased after the matching is successful.

Buy closing (short closing) refers to the buying contract that the user is no longer bearish about in the future index market and covers it, which is offset by the currently held selling contract and exits the market. Carry out the "buy and close short" operation, and the short position will be reduced after the matching is successful.

3. Order placing method

Limit price order: Users need to specify the price and quantity of the order. Limit orders can be used for both opening and closing positions.

Place an order at the counterparty price: If the user chooses to place an order at the counterparty price, the user can only enter the order quantity and cannot enter the order price.

The system will read the latest opponent price at the moment it receives this order (if the user buys, the opponent price is the sell 1 price; if the user sells, the opponent price is the buy 1 price ), place a limit order at this counterparty price.

4. Position

After the user opens a position and completes the transaction, he or she will have the position. The positions of the same type of contract in the same direction will be merged. In a contract account, there can only be a maximum of 6 positions, namely long position in the current week's contract, short position in the current week's contract, long position in the next week's contract, short position in the next week's contract, long position in the quarterly contract, and short position in the quarterly contract.

5. Order restrictions

The platform will limit the number of positions held by a single user for a certain period of contract and the number of orders placed for a single opening/closing position to prevent users from manipulating the market.

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