# How to Calculate the Cost of Opening a USDⓈ-M Perpetual Futures Contract Position
## Calculating the cost of opening a Limit Order:
**1. Calculate the Initial Margin**
Initial Margin
\= Notional Value / Leverage Multiplier
\=(49948.8\*1 BTC)/20x
\=2497.44
**2. Calculate Open Loss**
Open Loss = Number of Contracts × Absolute Value {min \[0, Order Direction × (Mark Price — Order Price)]}
Direction of order: 1 for long order；-1 for short order
* Open Loss of long order
\= Number of Contract \* Absolute Value {min\[0, Direction of order \* (Mark price — Order Price)]}
\= 1 \* Absolute Value {min\[0, 1 \* (49822.1- 49948.8)]}
\= 1 \* Absolute Value {min\[0, (-126.7)]}
\= 1 \* 126.7
\= 126.7
Open loss occurs when you place a long order.
* Open Loss of Short Order
\= Number of Contract \* Absolute Value {min\[0, Direction of order \* (Mark Price — Order Price)]}
\= 1 \* Absolute Value {min\[0, -1 \* (49822.1- 49948.8)]}
\= 1 \* Absolute Value {min\[0, 126.7]}
\= 1 \* 0
\= 0
Open loss does not occur when you place a Short order.
**3. Calculate the cost of Opening a Position**
Since there is no Open Loss when you place a Short order, the cost of opening a Short order is equal to the Initial Margin.
* Cost of opening a Long Order
\=2497.44 + 126.7
\=2624.14
* Cost of opening a Short Order\
\=2497.44 + 0\
\=2497.44
Since an Open Loss occurs when you place a Long order, it costs more to place a Long order. In addition to the Initial Margin, you must also take into account the Open Loss.
## Calculating the cost of opening a Market Order:
**1. Calculate Estimated Entry Price**
Long order estimated entry price = ask\[0] \* (1 + 0.05%); Short order estimated entry price = max(bid\[0], mark price)
* Estimated entry price of long order
\=ask\[0]\*(1 + 0.05%)
\=49939.9\*(1 + 0.05%)
\=49964.87
\*\[0]：Level 1 price
* Assuming price of short order
\= max(bid\[0], mark price)
\= max (49940, 49904.5)
\= 49940
\*\[0]：Level 1 price
**2. Calculate the Initial Margin**
Initial Margin = Notional Value / Leverage Multiplier
* Initial margin for long order
\= Estimated entry price of long order \* Number of Contracts / Leverage Multiplier
\=49964.87 \* 1 /20
\=2498.2435
* Initial margin for short order
\= Estimated entry price of short order \* Number of Contracts / Leverage Multiplier
\=49940 \* 1/20
\=2497
**3. Calculate the Open Loss**
Open Loss = Number of Contract \* Absolute Value {min\[0, direction of order \* (mark price — order price)]}
Direction of order: 1 for long order；-1 for short order
* Open loss for long order
\= Number of Contract \* Absolute Value {min\[0, direction of order \* (mark price — order price)]}
\= 1 \* Absolute Value {min\[0, 1 \* (49904.5–49964.87)]}
\= 1 \* Absolute Value {min\[0, -60.37]}
\= 1 \* 60.37
\= 60.37
An Open Loss occurs when you place a Long order.
* Open loss for short order
\= Number of Contract \* Absolute Value {min\[0, direction of order \* (mark price — order price)]}
\= 1 \* Absolute Value {min\[0, -1 \* (49904.5–49940)]}
\= 1 \* Absolute Value {min\[0, 35.5]}
\= 1 \* 0
\= 0
An Open Loss does not occur when you place a Short order.
**4. Calculating the cost of Opening a Position**
Since Open Loss occurs when you place a Long order, it costs more to place a Long order. In addition to the Initial Margin, you must also take into account the Open Loss.
* Cost of opening a Long Order
\=2498.2435+60.37
\=2558.6135
* Cost of opening a Short Order
\=2497+0
\=2497
Since there is no Open Loss when you place a short order, the cost of opening a Short order is equal to the Initial Margin.
