Profit & Loss (Example 3)


Example 3

You placed a 2 contracts “Sell” order on S&P for Month September (SP13SEP) at price 1700.25. In two weeks period, SPJUN price is still going up, so you decide to cut your losses and close the order at price 1704.75.

Your losses will be calculated as follows:

Loss = (Bid Price – Ask Price) X Index Point Value X Number of Contracts = (1700.25 – 1704.75) X $50 X 2.0 Lots = -450.00 USD (Loss)

Profit & Loss Calculation for Energies>

Trading in futures contracts of energies is to buy or sell a CFD on energy contract in the futures market for delivery on a specified future date.

The most common energy contracts that are made available for OTC trading by most brokers are Light Sweet Crude Oil, and Natural Gas.

Sweet crude future contracts are the most popular oil contracts traded on commodity markets. 1 standard contract of Light Sweet Crude Oil equals a 1000 Barrels.

Investors in the energy market can use Natural Gas futures contracts as well to profit from the changes in the underlying price. 1 standard contract of Natural Gas equals 10,000 MMbtu.

Oil and natural gas prices are quoted in US Dollars. Therefore, your profits will be directly calculated in USD according to the following equation:

Profit/Loss = (Bid Price – Ask Price) X Contract Size X Number of Contracts

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