How to Calculate Profit and Loss

When calculating profit or loss, consider the spread, as well as the interest differential. For easy calculation, use the following tools:

The following examples illustrate how to calculate profit or loss when you close particular trades. (Interest differentials are not considered.)

Example 1:

You see that the rate for EUR/USD is 0.9517/22 and decide to sell 10,000 EUR. Your trade is executed at 0.9517.

10,000 EUR * 0.9517= 9,517.00 USD

You sold 10,000 EUR and bought 9,517.00 USD.

After you trade, the market rate of EUR/USD decreases to EUR/USD=0.9500/05. You then buy back 10,000 EUR at 0.9505.

10,000 EUR *0.9505= 9,505.00 USD

You sold 10,000 EUR for 9,517 USD and bought 10,000 back for 9,505. The difference is your profit:

9,517.00-9,505.00= \$12.00 USD

Example 2:

You see that the rate for USD/JPY is 115.00/05 and decide to buy 10,000 USD. Your trade is executed at 115.05.

10,000 USD*115.05= 1,150,500 JPY

You bought 10,000 USD and sold 1,150,500 JPY.

The market rate of USD/JPY falls to 114.45/50. You decide to sell back 10,000 USD at 114.45.

10,000 USD*114.45=1,144,500 JPY

You bought 10,000 USD for 1,150,500 JPY and sold 10,000 USD back for 1,144,500 JPY. The difference is your loss and is calculated as follows: 1,150,500-1,144,500= 6,000 JPY. Note that your loss is in JPY and must be converted back to dollars.

To calculate this amount in USD:

6,000 JPY/ 114.45 = \$52.42 USD or
6,000 *1/114.45=\$52.42