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Calculating your earnings on Binance, like on any trading platform, depends on the type of trading you perform: spot or futures. Below, I explain the basic concepts for both.
1. Earnings in Spot Trading
Spot trading is the simplest. You buy an asset and sell it for a higher price. The basic formula is as follows:
Gross Profit = (Selling Price - Purchase Price) x Amount of Asset
From this gross profit, you must subtract the fees charged by Binance.
Net Profit = Gross Profit - Trading Fees
Trading Fees: Binance charges a fee for each transaction. The standard fee is 0.1% for both "makers" and "takers", but it can be lower if you have a higher trading volume, a higher account level, or if you pay with BNB (the Binance coin).
Practical Example (Spot):
You buy 0.05 BTC at a price of $30,000 per BTC.
Investment: 0.05 BTC x $30,000 = $1,500
You sell 0.05 BTC at a price of $32,000 per BTC.
Gross Profit: ($32,000 - $30,000) x 0.05 BTC = $2,000 x 0.05 = $100
Fees (assuming 0.1%):
Buy Fee: $1,500 x 0.1% = $1.50
Sell Fee: (0.05 BTC x $32,000) x 0.1% = $1.60
Total Fees: $1.50 + $1.60 = $3.10
Net Profit: $100 - $3.10 = $96.90
2. Earnings in Futures Trading (with leverage)
Futures trading is more complex due to leverage and funding fees. The profit or loss (PnL) can be "realized" or "unrealized".
Unrealized PnL: It is the potential profit or loss of a position that is still open. It is calculated in real-time.
Realized PnL: It is the profit or loss you obtain once you close the position.
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Profits in futures trading are more complex due to leverage and funding fees. Profit or loss (PnL) can be 'realized' or 'unrealized'.

Unrealized PnL: This is the potential profit or loss of a position that is still open. It is calculated in real time.

Realized PnL: This is the profit or loss you obtain once you close the position.

The basic formulas for unrealized PnL are:

Long Position: Unrealized PnL = (Current Price - Entry Price) x Number of Contracts x Contract Multiplier

Short Position: Unrealized PnL = (Entry Price - Current Price) x Number of Contracts x Contract Multiplier

Additional factors in futures:

Leverage: Multiplies your potential profits (and losses). For example, with 10x leverage, a 1% movement in the asset's price can result in a 10% PnL of your initial margin.

Initial Margin: Profit or loss is calculated as a percentage of this margin.

Funding Fees: These are paid or received every 8 hours (normally). If the funding rate is positive, those with long positions pay those with short positions. If it is negative, shorts pay longs. This can significantly affect your PnL.

Trading Fees: Similar to spot fees, but often lower.

How Binance does it for you:

Simply click on the calculator icon in the futures interface and you can estimate:

Income: You enter your entry price, exit price, and amount, and the calculator shows you the estimated profits and the percentage PnL.

Target Price: It helps you determine at what price you should close your position to achieve a specific profit.

Liquidation Price: It tells you at what price your position will be automatically closed if the market moves against you, so you do not lose more than you invested in the margin of that trade.

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