Futures and Perpetuals · Crypto Trading Guide

The same market move can produce different settlement amounts across contract designs. Read the multiplier, profit currency and collateral rules together.

Identify the payout currency

For a simple linear contract, profit is proportional to the price change and base asset quantity. A hypothetical long representing 0.2 BTC gains $1,000 when price rises from $50,000 to $55,000. It may settle in dollars or a designated token. Settlement in a stablecoin introduces that token’s own conversion and issuer risks.

Work through an inverse contract

For one common inverse structure with dollar face amount N, a long’s coin profit is N × (1 ÷ entry price minus 1 ÷ exit price). Assume N is $10,000, entry is $50,000 and exit is $55,000. Profit is about 0.0181818 BTC, worth $1,000 at the exit price. This formula applies only when the actual contract uses that structure and multiplier.

Include the collateral balance

If collateral is also held in BTC, its dollar value changes independently of the contract’s coin profit. A trader focused only on the position’s reported profit can overlook a decline in the remaining collateral. Conversely, rising collateral value can make account returns look better than the trade itself. Keep collateral revaluation and trading profit separate in the ledger.

Avoid false equivalence

Equal displayed leverage across two products does not establish equal liquidation risk. Collateral haircuts, settlement timing, margin tiers and conversion fees can differ. Contracts with another payout design, such as a quanto structure, need their own formula. Before comparing two positions, express notional, profit and collateral in the same reporting currency and document the conversion timestamp. Test both a favourable and adverse move rather than validating a formula with only one example.

Try it yourself

Using the stated inverse formula, a $5,000 long enters at $50,000 and exits at $40,000. What is coin profit?

Show the worked answer

It is 5,000 × (1/50,000 minus 1/40,000) = a loss of 0.025 BTC, worth $1,000 at the exit price. Collateral revaluation and costs are additional.

Further reading

Educational material. Examples and rates are hypothetical, not trade recommendations. Product terms, eligibility and risks vary by venue and jurisdiction.

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