The following formulas are used to calculate Profit / Loss:
Profit / Loss ($):
P/L $ = (Current Price USD - Open Price USD) * amount
Profit / Loss (%):
P/L % = (Current Price USD / Open Price USD - 1) * 100%
1. John Smith has 100 ETH in his Wallet. He transfers 70 ETH to his Portfolio. The Open Price ($) and Current Price ($) are equal at the moment of transfer ($1100), therefore P/L ($ and %) are both set to 0.
2. John buys 1562.5 ETС for 50 ETH. The current ETC/ETH price is 0.032 and the current price of ETH/USD is $1120 - making the Open Price ($) for ETC $35.84. The P/L ($ and %) values for ETC will initially be set to 0 - until the market changes, however, both of the P/L values for ETH will change to align with the Portfolio's new asset allocation (from 50 to 20 ETH), along with ETH's price change (from $1100 to $1120).
P/L ($) for ETH will be recalculated to $400:
($1120 - $1100) * 20 = $400
and ETH's P/L (%) will become +1.8%:
($1120 / $1100 - 1) * 100% = 1.8%
3. Some time passes, John hasn't been trading but the prices of his assets have changed.
Let's suppose that ETC/USD went down while ETH/USD went up.Current Price ($) for ETH is now $1200 and both P/L values will change accordingly.
ETH P/L ($) is now $2000:
($1200 - $1100) * 20 = $2000
ETH P/L (%) is now +9.09%:
($1200 / $1100 - 1) * 100% = 9.09%
4. John decides to add more Funds to his account and transfers an additional 30 ETH from his Wallet.
First and foremost it will affect the Open Price ($) for ETH. This will be recalculated using the Open Price formula:
(20 * $1100 + 30 * $1200) / 50 = $1160
- 20 is the initial amount of ETH before the transfer. It had an opening price of $1100.
- 30 is the amount of ETH that was transferred to the Portfolio. It had an opening price of $1200.
- 50 is the total amount of ETH in the Portfolio now.
- $1160 is the open price of this asset after the transfer.
This change doesn't affect P/L ($):
($1200 - $1160) * 50 = $2000
But this does affects P/L (%) since it relies on Open Price which has since been changed due to the transfer.
ETH P/L (%) is now +3.44%:
($1120/$1160 - 1)*100% = 3.44%
5. John spends 25 ETH to buy 100 LTC.
Since the amount of ETH has changed from 50 to 25, P/L ($) is now $1000:
($1200 - $1160) * 25 = $1000
P/L (%) doesn't change because the ETH price hasn't changed:
($1120 / $1160 - 1) * 100% = 3.44%
6. John transfers 20 ETH from Portfolio to Wallet before any price changes occur.
Unlike transfers to Portfolio, transferring funds out of it doesn't affect P/L (%) since the prices remain the same, this does however affect P/L ($).
P/L ($) for ETH after the transfer is:
($1200 - $1160) * 5 = $200