P&L calculation.

[Guest EUGEND]

I am trying to figure out how IG calculates the P&L on trades.

I began trading with a demo account and after some trades i started to check the P&L for every deal I made.

Well,  let's take dow jones cash index. I calculated the P&L as [close level-entry level] * contract size. I see a difference between P&L recognised by IG and P&L calculated with the formula I wrote. The difference (let's call it commission) is proportional to the P&L amount and asset class traded.

Could somebody explain me where this difference comes from?

[Caseynotes]

3 minutes ago, EUGEND said:

I am trying to figure out how IG calculates the P&L on trades.

I began trading with a demo account and after some trades i started to check the P&L for every deal I made.

Well,  let's take dow jones cash index. I calculated the P&L as [close level-entry level] * contract size. I see a difference between P&L recognised by IG and P&L calculated with the formula I wrote. The difference (let's call it commission) is proportional to the P&L amount and asset class traded.

Could somebody explain me where this difference comes from?

Hi, the 'commission' you refer to is likely to be the spread. The 'entry' level for a long is the buy price but the 'close' level for the long is the sell price.

[Guest EUGEND]

2 minutes ago, Caseynotes said:

Hi, the 'commission' you refer to is likely to be the spread. The 'entry' level for a long is the buy price but the 'close' level for the long is the sell price.

Hi, thank you the answer. But I don't think so. 

Firtly, because it is proportional to the P&L amount at the moment of closing position, and not the contract size.

Secondly, when I download the trading history in excel, it shows the columns with opening trades, closing trades, contract sizes and P&L amount. That's where i take the data to figure out the difference. In other words, the opening trades and closing trades should include the spread commission. Nevertheless, I still see differences.

Can you check on your side?

 

Thanks.

[Caseynotes]

11 minutes ago, EUGEND said:

Hi, thank you the answer. But I don't think so. 

Firtly, because it is proportional to the P&L amount at the moment of closing position, and not the contract size.

Secondly, when I download the trading history in excel, it shows the columns with opening trades, closing trades, contract sizes and P&L amount. That's where i take the data to figure out the difference. In other words, the opening trades and closing trades should include the spread commission. Nevertheless, I still see differences.

Can you check on your side?

 

Thanks.

Ok , can you screen shot an example?

[Guest EUGEND]

15 minutes ago, Caseynotes said:

Ok , can you screen shot an example?

Sure.

Here it is 

As I said, the difference shows up based on P&L amount and asset class.

[Caseynotes]

8 minutes ago, EUGEND said:

Sure.

Here it is 

As I said, the difference shows up based on P&L amount and asset class.

The conversion rate is multiplied by the PnL amount.

So for Dax  -201.6 x the conversion rate =  -227.3

[Guest EUGEND]

24 minutes ago, Caseynotes said:

The conversion rate is multiplied by the PnL amount.

So for Dax  -201.6 x the conversion rate =  -227.3

Now is clear. I thank you very much.  

[Caseynotes]

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