PnL & Leverage Basics - Ascend Documentation

On Ascend, you profit or lose based on how the probability price moves relative to your entry price. This is scaled by your position size and leverage.

PnL updates continuously as prices change. You do not have to wait for event resolution to see gains or losses.

The PnL Formula

Unrealized PnL is calculated using four inputs:

Input	What It Means
Entry Price	The probability price when you opened the position
Mark Price	The current probability price used for valuation
Position Size	How large your position is
Direction	+1 for LONG, -1 for SHORT

The formula:

Unrealized PnL = Direction × Position Size × (Mark Price − Entry Price)

This applies symmetrically to LONG and SHORT positions.

PnL Examples

LONG position, probability rises

You open LONG at 50% with position size 1,000 USDC notional.Probability rises to 58%.

PnL = +1 × 1,000 × (0.58 − 0.50)
    = +1 × 1,000 × 0.08
    = +80 USDC

You are up 80 USDC.

LONG position, probability falls

You open LONG at 50% with position size 1,000 USDC notional.Probability falls to 44%.

PnL = +1 × 1,000 × (0.44 − 0.50)
    = +1 × 1,000 × (−0.06)
    = −60 USDC

You are down 60 USDC.

SHORT position, probability falls

You open SHORT at 65% with position size 1,000 USDC notional.Probability falls to 58%.

PnL = −1 × 1,000 × (0.58 − 0.65)
    = −1 × 1,000 × (−0.07)
    = +70 USDC

You are up 70 USDC.

SHORT position, probability rises

You open SHORT at 65% with position size 1,000 USDC notional.Probability rises to 72%.

PnL = −1 × 1,000 × (0.72 − 0.65)
    = −1 × 1,000 × 0.07
    = −70 USDC

You are down 70 USDC.

How Leverage Works

Leverage allows you to control a larger position with less capital. The relationship between margin and position size:

Initial Margin = Position Notional / Leverage

Or flipped:

Position Notional = Initial Margin × Leverage

1x Leverage

100 USDC margin controls 100 USDC notional. A 10% probability move means 10 USDC PnL.

10x Leverage

100 USDC margin controls 1,000 USDC notional. A 10% probability move means 100 USDC PnL.

Higher leverage increases sensitivity to probability movement. The same price change creates a larger PnL impact.

Leverage Example

You have 100 USDC and want to go LONG at 50%.

5x Leverage
10x Leverage
20x Leverage

Position notional: 100 × 5 = 500 USDCProbability rises from 50% to 55% (5 point move).

PnL = 500 × 0.05 = +25 USDC

Return on margin: 25%

Position notional: 100 × 10 = 1,000 USDCProbability rises from 50% to 55% (5 point move).

PnL = 1,000 × 0.05 = +50 USDC

Return on margin: 50%

Position notional: 100 × 20 = 2,000 USDCProbability rises from 50% to 55% (5 point move).

PnL = 2,000 × 0.05 = +100 USDC

Return on margin: 100%

The same 5 point move produces 25, 50, or 100 USDC depending on leverage. This works in both directions. Losses scale the same way.

Leverage Cuts Both Ways

Higher leverage amplifies losses just as it amplifies gains.

Leverage	5 Point Gain	5 Point Loss
5x	+25 USDC	-25 USDC
10x	+50 USDC	-50 USDC
20x	+100 USDC	-100 USDC

With 20x leverage, a 5 point move against you wipes your entire 100 USDC margin. Leverage operates within explicit market-defined limits to ensure consistent risk behavior.

Mark-to-Market

Positions are continuously marked to the mark price. This means:

PnL updates in real time as probabilities move

Your equity (margin + unrealized PnL) changes constantly

Risk checks run against current mark price, not entry price

You always know where you stand. No waiting for settlement to see your position value.

Position Lifecycle

A position on Ascend follows a clear lifecycle:

Open

You open a LONG or SHORT position with defined margin and leverage.

Update

As probability prices change, PnL and risk metrics update in real time.

Manage

You may increase, reduce, or partially close the position at any time within market rules.

The position is closed voluntarily by you or through system-defined processes like liquidation or settlement.

Each stage follows deterministic mechanics governed by market parameters.

Next: Perpetual Market Structure

Learn how perpetual markets work without expiry

​The PnL Formula

​PnL Examples

​How Leverage Works

1x Leverage

10x Leverage

​Leverage Example

​Leverage Cuts Both Ways

​Mark-to-Market

​Position Lifecycle

Next: Perpetual Market Structure

The PnL Formula

PnL Examples

How Leverage Works

Leverage Example

Leverage Cuts Both Ways

Mark-to-Market

Position Lifecycle