How do I calculate the conversion profit and loss (P/L)?
When trading an instrument denominated in a different currency than the account currency an FX conversion will occur automatically.
If the instrument currency appreciates against your account currency you will profit, conversely, if the instrument currency depreciates against your account currency you will incur a loss.
To calculate the Conversion P/L, shown in the position details, you need to do the following:
- Calculate the difference between the Open and Close conversion rate
- Multiply the current market value of the position (in the instrument currency) by the difference between the two conversion rates
Conversion P/L = (RateClose - RateOpen) * value of position.
Conversion P/L is calculated only for cash products: stocks, bonds, mutual funds, options.
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