Before you begin trading, a very important concept to become familiar with is that of unrealized and realized PNL (profit and loss). Unrealized PNL is based on the difference between your average entry price for a commodity and its Mark Price (equal to the underlying Index Price times a decaying Funding basis rate). The realized PNL on the other hand, is based on the difference between your average entry price and the price at which the commodity is sold at. Realized PNL relates to how much you actually buy or sell your position at. In most cases, this will not equal the mark price.
Why choose a mark price system?
The primary reason is to help users avoid unnecessary liquidations, which would be more likely to occur with a Last Price marking system.
How can I quickly calculate my PNL?
Unrealized Profit = ($1/Avg. entry price – $1/mark price) * commodity quantity.
Realized Profit = ($1/Avg. entry price – $1/Avg. price sold) * commodity quantity.
What are fees are involved?
Perpetual contracts have a funding fee equal to 1% of your position every 8 hours. All trading fees are accounted for by your realized PNL.
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