- This topic has 5 replies, 2 voices, and was last updated 8 months ago by Spiritual_Ad_2130.

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- Friday, April 1st, 2022 at 09:19 #206631Ram_1979Participant
If you using margin(or leverage) how do you calculate the profit from a trade. Lets say you put $100,000 on bitcoin when bitcoin is at 50,000 and use 12x leverage and bitcoin goes to 60,000. Now I thought you could say 100,000 x 12 = 1,200,000 then the price increase between 50,000 and 60,000 is 20% so I thought you would say, (1,200,000 / 100 = 12,000) x 20 = 240,000. So if you put 100,000 on bitcoin with 12x leverage and a 20% increase in price your profit would be $240,000.

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But according to this site(link below) your profit would be $21,666. Obviously I am way out in my calculations so could somebody explain how they get a profit of $21,667 for the above example.

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Here is the site.

[ByBit Calculator For Profits & Fees MinistryOfMarginTrading.com](https://www.ministryofmargintrading.com/bybit-calculator)

Friday, April 1st, 2022 at 09:19 #206632MalletSwingingYou and the calculator are doing two different calculations.

You say ‘$100,000 @ 12x’ but what you really mean to say is ‘$1,200,000 @ 12x’

$100k @ 12x is actually only $8,333 of your money in

$1.2m @ 12x is all $100k of your money

That is why the calculator is not showing what you expected. In your example you would be up a total of 20% * 12, so 240% on whatever you put into the invest. If your initial investment is $8,333 you would make $21,667.

Do keep in mind that your loss tolerance using margin is right around 100 / leverageMultiplier, so in your case if BTC dropped ~8.3% from your $50,000 buyin price (that target price being `$45,835) you would lose your entire investment as the position would be liquidated by your exchange. Going 12x is pretty aggro!

Friday, April 1st, 2022 at 09:19 #206633Davinter30Can I interest you in not using leverage ?

Friday, April 1st, 2022 at 09:19 #206634Berry_MckockimurLet’s say bitcoin is currently 50k. you buy $1000 worth with 100x leverage. Your total position size is 100k or 2 bitcoin. Bitcoin goes up to 55k. Since your position is 2 BTC your position value is now 110k = 10k In profit. Keep in mind the fees for placing the order, and the funding rate for positions can be pretty large and unexpected depending on exchange etc. ex. If all the orders are short, opening short position will be costing you as time goes on, until there is an equal or more amount of longs. I think your calculating the “borrowed” BTC as profit, but you obviously don’t get it, you only get the profit not the loaned BTc

Friday, April 1st, 2022 at 09:19 #206635diamondboredYou need to define what percentage of the money in BTC is margin, or money you borrowed.

Friday, April 1st, 2022 at 09:19 #206636Spiritual_Ad_2130If u use leverage x12 use daily chart or u will get liquid fast enough

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