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In summary
Futures P&L, or profit and loss, represents the financial outcome of a futures trade. Traders calculate it using the difference between the buying and selling price of the contract, multiplied by the lot size. While gross profit depends on price movement, the final net profit also depends on brokerage, taxes, exchange charges, and other transaction costs.
Key points:
- Futures P&L depends on entry price, exit price, and lot size.
- A price increase benefits a long futures position.
- A price decrease benefits a short futures position.
- Lot size directly impacts the total profit or loss.
- Charges and taxes reduce net profitability.
- Futures positions can generate both realised and unrealised P&L.
- Losses can exceed the initial margin placed for the trade.
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What is futures P&L?
What is a futures contract and how does it work?
Futures P&L refers to the profit or loss generated from trading futures contracts. It reflects the difference between the contract's purchase price and sale price, adjusted for the contract's lot size.
A futures position may generate:
| P&L Type | Meaning |
|---|---|
| Profit | Exit price is favourable relative to entry price |
| Loss | Exit price is unfavourable relative to entry price |
| Realised P&L | Profit or loss after the position is closed |
| Unrealised P&L | Profit or loss while the position remains open |
Key factors affecting futures P&L
- Entry price
- Exit price
- Lot size
- Direction of trade
- Brokerage charges
- Taxes and statutory levies
- Exchange-related charges
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Current IPO
SME
CLAY CRAFT INDIA LIMITED
Bidding period
19 Jun 2026- 17 Jun 2026
Minimum investment
₹1,15,800 / 1 Lot
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AVIENCE BIOMEDICALS LIMITED
PRE-APPLY
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₹1,17,600 / 1 Lot
CLAY CRAFT INDIA LIMITED IPO
Bidding period
17 Jun 2026 -
19 Jun 2026
Minimum investment
₹1,15,800 / 1 Lot
DIKSHA POLYMERS LIMITED IPO
Bidding period
17 Jun 2026 -
19 Jun 2026
Minimum investment
₹1,34,400 / 1 Lot
LEAPFROG ENGINEERING SERVICES LIMITED IPO
Bidding period
17 Jun 2026 -
19 Jun 2026
Minimum investment
₹1,26,000 / 1 Lot
LIOTECH INDUSTRIES LIMITED IPO
Bidding period
17 Jun 2026 -
19 Jun 2026
Minimum investment
₹1,28,400 / 1 Lot
AVIENCE BIOMEDICALS LIMITED IPO
Bidding period
18 Jun 2026 -
22 Jun 2026
Minimum investment
₹1,17,600 / 1 Lot
Futures P&L formula
The basic futures P&L formula calculates the difference between the exit price and entry price and then multiplies the result by the contract lot size.
Long futures position
| Formula | Calculation |
| Profit/Loss | (Exit Price − Entry Price) × Lot Size |
Short futures position
| Formula | Calculation |
| Profit/Loss | (Entry Price − Exit Price) × Lot Size |
Formula components
| Component | Meaning |
| Entry Price | Price at which the futures position is opened |
| Exit Price | Price at which the position is closed |
| Lot Size | Number of units in one futures contract |
| Gross P&L | Profit or loss before charges and taxes |
The formula calculates gross profit or loss. Traders should deduct applicable charges and taxes to determine net P&L.
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How do you calculate profit in futures trading? Step by step
Calculating futures profit involves a straightforward process. Each step uses information available in the contract specification and trade details.
Step 1: Identify the entry price
Record the price at which the futures position was initiated.
Step 2: Identify the exit price
Record the price at which the futures position was closed.
Step 3: Calculate the price difference
Subtract the entry price from the exit price for a long position. Reverse the calculation for a short position.
Step 4: Determine the lot size
Identify the number of units contained in one futures contract.
Step 5: Multiply by lot size
Multiply the price difference by the lot size to calculate gross P&L.
Step 6: Deduct applicable charges
Subtract brokerage, taxes, exchange charges, and other applicable costs to determine net P&L.
Quick calculation framework
| Step | Action |
| 1 | Record entry price |
| 2 | Record exit price |
| 3 | Calculate price difference |
| 4 | Identify lot size |
| 5 | Calculate gross P&L |
| 6 | Deduct charges and taxes |
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Futures P&L calculation example
A practical example helps illustrate how futures profit and loss is calculated.
Example: Long futures position
Assume the following trade:
| Particulars | Value |
| Entry Price | ₹ 2,000 |
| Exit Price | ₹ 2,050 |
| Lot Size | 100 units |
Step 1: Calculate price difference
Price Difference = ₹ 2,050 − ₹ 2,000
Price Difference = ₹ 50
Step 2: Calculate gross profit
Gross Profit = ₹ 50 × 100
Gross Profit = ₹ 5,000
Example: Loss scenario
| Particulars | Value |
| Entry Price | ₹ 2,000 |
| Exit Price | ₹ 1,960 |
| Lot Size | 100 units |
Price Difference = ₹ 1,960 − ₹ 2,000
Loss = ₹ 40 × 100
Loss = ₹ 4,000
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Which charges and taxes affect futures P&L?
Gross profit does not represent the final amount retained by the trader. Several costs can reduce net profitability.
Common charges affecting futures P&L
| Charge Type | Impact on P&L |
| Brokerage | Reduces net profit |
| Securities Transaction Tax (STT) | Applicable as per prevailing rules |
| Exchange Transaction Charges | Reduces net profit |
| GST | Applicable on eligible charges |
| SEBI Charges | Regulatory cost |
| Stamp Duty | Applicable as per regulations |
Why charges matter
A trade that appears profitable before costs may generate a lower net return after charges are deducted. Frequent trading can increase the cumulative impact of transaction expenses.
Traders often review both gross P&L and net P&L to assess actual trading performance.
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Upcoming IPO
Mainboard
SME
Aarvee Engineering Consultants Limited
Bidding
To
be announced
Price
To be announced
Aastha Spintex Limited
Bidding
To
be announced
Price
To be announced
Absolute Project India Limited
Bidding
To
be announced
Price
To be announced
AceVector Limited
Bidding
To
be announced
Price
To be announced
Adroit Industries India Limited
Bidding
To
be announced
Price
To be announced
Conclusion
Futures P&L measures the profit or loss generated from a futures contract. The calculation depends on the difference between the entry price and exit price, multiplied by the contract's lot size. Long positions generally benefit from rising prices, while short positions generally benefit from falling prices.
Understanding the futures P&L formula, lot size impact, and transaction costs helps traders evaluate trade outcomes more accurately. Charges such as brokerage, taxes, and exchange fees can reduce net profitability and should always be included when assessing overall performance.
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Frequently Asked Questions
Futures P&L Calculation
How do you calculate profit in future trading?
You calculate profit in future trading by finding the difference between the entry price and exit price and multiplying that difference by the contract's lot size. For a long position, profit equals the exit price minus the entry price, multiplied by the lot size. After calculating gross profit, you should deduct brokerage, taxes, and other applicable charges to determine net profit.
What is the formula for futures P&L?
The futures P&L formula depends on the direction of the trade. For a long futures position, the formula is (Exit Price − Entry Price) × Lot Size. For a short futures position, the formula is (Entry Price − Exit Price) × Lot Size. The result represents gross profit or loss before charges and taxes.
How does lot size affect futures profit?
Lot size directly affects futures profit because the price difference is multiplied by the number of units in the contract. A larger lot size increases both potential profits and potential losses. Even a small price movement can create a significant financial impact when the contract contains a large number of units.
What is the difference between realised and unrealised P&L?
Realised P&L refers to the profit or loss recorded after a futures position is closed. Unrealised P&L represents the profit or loss that exists while the position remains open. Unrealised P&L changes continuously as market prices fluctuate and becomes realised only when the trade is exited.
Which charges reduce futures trading profit?
Several charges can reduce futures trading profit, including brokerage, Securities Transaction Tax (STT), exchange transaction charges, GST, SEBI-related charges, and stamp duty. These costs are deducted from gross profit to arrive at net profit. Traders should include all applicable charges when evaluating the outcome of a futures trade.
Can futures P&L be negative?
Yes, futures P&L can be negative when the market moves against the position. A long futures position may incur a loss if prices fall, while a short futures position may incur a loss if prices rise. Because futures contracts involve leverage and lot sizes, losses can become significant if risk is not managed carefully.
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