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Does Leverage affect my PNL?

  • Updated

No, leverage does not directly affect your Profit and Loss (PNL). Instead, leverage determines the amount of margin needed for your position. Higher leverage means less margin is required, allowing you to open larger positions with less capital.

While leverage itself doesn't change your PNL, it enables larger position sizes, which can significantly impact your potential profits or losses.  

 

What actually affects my PNL?

Your PNL is primarily determined by:

  • Position Size
  • Price Difference between your Average Entry Price and your Exit Price.
  • Trading Fees
  • Contract Multiplier
  • Funding Payments: Applicable to Perpetual Contracts
     

 

How is PNL Calculated?

The calculation for it is the following:

Unrealised PNL = Number of Contracts * Multiplier * (1/Average Entry Price - 1/Exit Price)
Realised PNL = Unrealised PNL - taker fee + maker rebate -/+ funding payment

 

To understand further how Realised PNL is calculated, refer to the following resources:

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