What is P&L

1. Profit and Loss Analysis

Profit and Loss Analysis consists of three modules: My Earnings, P&L Calendar, and P&L Distribution. Webull offers several filters for profit and loss analysis in different currencies, scenarios and categories.

2. Daily Cut-off Concept

The profit and loss analysis is calculated based on the daily cut-off time at 8:00 PM Eastern Standard Time. For example, the profit and loss between 8:00 PM on T-1 day and 8:00 PM on T day is considered as the profit and loss for T day.

3. My Earnings

My Earnings offers an overview of your profits, losses, and net account value. The displayed information can be customised based on the filters you apply.

3.1 Chart Explanation

The chart shows the trend on your Rate of Return, Total P&L and Net Account Value. The x-axis represents time, while the y-axis represents the corresponding data.

(1) Rate of Return: Each data point on the chart signifies the cumulative rate of return for the selected time period. You have the option on the left side of the trend chart to select different market indices for comparative analysis.

(2) Total Profit and Loss: Each data point on the chart signifies the overall profit and loss amount for the selected time period.

(3) Net Account Value: Each data point on the chart signifies the net account value for that specific day. If it's a non-trading day, the net account value remains equal to that of the previous trading day.

4. Rate of Return Calculation Formula

Webull provides three different methods for return calculation, which are explained below.

4.1 Simple-Weighted Rate of Return

This method calculates how much your investment grew or shrank over time, taking into account both the initial investment and any additional money added or withdrawn during the period.

Simple Weighted Return Rate = Cumulative Returns during the Period / (Beginning Net Assets + Net Inflow during the Period)

Cumulative Returns during the Period = Ending Net Assets - Beginning Net Assets - Net Inflow during the Period

4.2 Time-Weighted Rate of Return

This method measures the performance of your investments over time, disregarding the impact of any cash movements in or out of your account. It focuses solely on the investment's ability to generate returns.

Time-Weighted Return Rate = [(1+R1)(1+R2)… (1+Rn)-1]*100%

R = Daily Return / (Beginning Net Assets + Daily Net Inflow)

Daily Return = Day Ending Net Assets - Day Beginning Net Assets - Daily Net Inflow

The time-weighted rate of return considers the time value of money and can be understood as the compound return earned on an initial investment of 1 unit until the end of the period. It calculates the cumulative return from the beginning to the end by first calculating the daily return. This method helps to mitigate the impact of cash flow changes on returns to a certain extent. However, this method treats the daily returns equally without considering the investment amount weights, which may result in calculating positive returns even when the user incurs losses, leading to a possible inconsistency between the sign of the return and the period return.

4.3 Cash-Weighted Rate of Return

This method evaluates the performance of your investments, factoring in the timing and amount of cash flows into or out of your account. It considers both the investment's returns and the timing of your cash transactions.

Dollar-Weighted Return Rate = Cumulative Returns during the Period / Adjusted Beginning Net Assets

Cumulative Returns during the Period = Ending Net Assets - Beginning Net Assets - Net Inflow during the Period

Adjusted Beginning Net Assets = Beginning Net Assets + ∑(Single Net Inflow Amount * Time Weight)

Time Weight = Number of Days the Cash Flow Exists / Total Number of Days

The weight of the daily net inflow is determined by dividing the number of days the cash flow persists within the period by the total number of days in that period. For instance, if the assessment period spans 100 days and there's a cash inflow of $200 on the 20th day, the weight of that day's cash inflow would be (100-20)/100 = 0.8. This means the $200 would be treated as $160 that were sustained throughout the entire evaluation period. The cash-weighted rate of return considers both the net inflow of funds and stocks, while also factoring in the influence of varying position weights during different time intervals. It accurately calculates both positive and negative returns, accommodating negative returns during loss periods and positive returns during profitable periods.

The results calculated based on the three types of return calculation methods are as follows:

Simple-Weighted Return = [ ( 50-150 )/(100+1000 )] *100% = -9.09%

Time-Weighted Return = [(1+50%)*(1-13.04%) -1]*100% = 30.44%

Cash-Weighted Return = (50-150 )/ [100 +1000* 1/2 ] = -16%

5. Net Inflow Amount

Net Inflow Amount = Deposits - Withdrawals + Incoming Fund Transfers - Outgoing Fund Transfers + Incoming Stock Transfers - Outgoing Stock Transfers + Incoming Currency Exchanges - Outgoing Currency Exchanges - Others

Fund Deposit/Withdrawal: This refers to adding or withdrawing funds.

Fund Transfers: This involves shifting funds between the brokerage account and other accounts (outgoing transfers), or vice versa (incoming transfers).

Stock Transfers: This indicates the value of transferred stocks. If the transfer occurs during trading hours, calculations are based on the previous day's closing price. For transfers after trading hours, calculations rely on the closing price of the relevant trading day.

Currency Exchanges: This covers both incoming and outgoing currency exchanges, with any differences accounted for in the net inflow amount.

Others: This category encompasses gifted stocks. If stocks are credited during trading hours, calculations are based on the previous day's closing price. For credits after trading hours, calculations are based on the closing price of the relevant trading day.

6. Other common questions

6.1 Is the data in P&L Analysis updated in real-time?

The information in the My Earnings and P&L Calendar is updated in real-time. You may need to manually refresh the page to access the latest data. The P&L Distribution, however, is updated daily at 8:00 PM Eastern Standard Time.

6.2 Why does the profit figure vary between the P&L Calendar and Asset?

The difference in profit for the current day between P&L Calendar and Asset is mainly because the figure on Asset includes other relevant fees incurred during the trading process.