Glossary
What is ROE in crypto futures trading?
Also called: return on equity, return on margin, ROI
Updated Ninja Terminal team
Definition
ROE, or return on equity, is the profit or loss of a position expressed as a percentage of the margin that supports it. Because leverage shrinks the margin needed, ROE is larger than the price change. A 2% price move on a 10x position gives about 20% ROE, before fees and funding.
Price change describes the market. ROE describes what happened to your capital.
How is it calculated?
ROE = PnL / margin used x 100
For a position without extra margin, ROE is about price change % x leverage.
Example: long BTC at 60,000 with 10x leverage and 1,000 USD of margin on a 10,000 USD notional.
- Mark price rises to 61,200 (+2%). PnL is +200 USD. ROE is 200 / 1,000 = +20%.
- Mark price falls to 59,400 (-1%). PnL is -100 USD. ROE is -10%.
What can change the number?
- The leverage setting, which sets the margin base.
- Added or removed margin on isolated positions.
- The venue’s definition of margin. On Binance, a position’s margin field can include margin held for open orders, so ROE should be derived from the position’s own margin.
- Fees and funding.
ROE based on unrealized PnL moves with the mark price. ROE on a closed trade is based on realized PnL.
Where does it appear in Ninja Terminal?
The positions table shows PNL with a ROI percentage next to it. Different venues define margin in different ways, so compare numbers against the exchange only if you use the same basis.
Frequently asked questions
Is ROE the same as ROI?
In futures apps the terms are often used for the same idea: return relative to the margin. Check the label and the formula on your platform.
Why is my ROE much higher than the price move?
Leverage. The margin is a fraction of the notional, so each percent of price change is a larger percent of the margin.