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Understanding Profit & Loss Calculation
After you have chosen your Strike Token and calculate its level of capital efficiency (read here to learn how to calculate capital efficiency), you can use it to calculate profit and loss.
To forecast your profit and loss, start by multiplying the capital efficiency with the forecast price change percentage. The result is the profit and loss percentage of your investment due to the asset price fluctuation.

Profit Scenario

For instance, Blum is holding a LONG Strike Token of asset α with a capital efficiency of 1.5X.
  1. 1.
    He plans to take profit on his Strike Token when the price of α increases by 10%.
  2. 2.
    To calculate his forecasted profit, he multiplied asset α price percentage changes with the capital efficiency of his LONG Strike Token (10% x 1.5), which is 15%
  3. 3.
    This means he will make a profit of 15% on his investment if he sells his Strike Token when the price of asset α increases by 10%.

Loss Scenario

For instance, Blum is holding a LONG Strike Token of asset α with a capital efficiency of 1.5X.
  1. 1.
    He plans to cut loss on his Strike Token when the price of α decreases by 10%.
  2. 2.
    To calculate his forecasted loss, he multiplied asset α price percentage changes with the capital efficiency of his LONG Strike Token (-10% x 1.5), which is -15%
  3. 3.
    This means he will make a loss of -15% on his investment if he sells his Strike Token when the price of asset α decreases by 10%