Bidimensional X-Ray Radiography in the DARWINs Terminal

20 March 2018
The Market Owl

In this short blog post, we will offer you in broad brush strokes the latest functionality that we have just implemented in the DARWINs Terminal, which will make a 2-D X-Ray Radiography of the current status of your investments in different timeframes.

 

New tab in DARWINs Terminal / Chart

As of today, when you access your DARWINs Terminal – remember that you have to click on the bottom bar to display it – you will spot two symbols:

  • % => shows the profitability of your portfolio in percentage terms, exactly as it has been up to now.

  • €, $ or £, depending on your base currency, reflects the amount of capital earned/loss in monetary terms

Example:

If you deposit 1000 € in the DARWINs Terminal, invest in the DARWIN XXX and obtain a 100 € profit:

  • Return % = 10%
  • Profit = 100 €

So far so good but …

 

Would you be able to tell us how much capital you have obtained / lost since your first deposit?

Note: if after 30 seconds you have not managed to get the final figure, you will perfectly understand the reason why we are launching this new functionality.

In order for you to know your portfolio % return, as well as its “translation” to €, $ or £, we present this new chart tool. It is identified with a  €, $ or £ symbol, depending on your base currency.

It will allow you to follow the evolution of your profits/losses (P&L) in your desired timeframe. You can do this, either by zooming in and out -click and drag on the chart-, or by selecting one of the standard timeframes that we offer by default placed on the top-right corner (ALL, 1A, 6M, 3M, 1M, 1W, 1D).

 

The 3 P&L generating variables

In order to make it easy to understand, we will identify the 3 “P&L – variables” for an investor in Darwinex:

Total P&L = P&L in investments (open and closed) + diversification rebates –  Performance Fees (paid and withheld)

Thanks to this new tool, you will not only have access to the exact amount of capital that you have obtained / lost, but you will also enjoy the possibility of breaking down its 3 variables.

To do this, you merely have to click on the little circle next to the variable you want to analize.

 

Improvements to the profitability formula

Since we have already rolled up our “improvement sleeves”, we could not ignore the one implemented in the profitability formula.

To date, for the calculation of profitability shown in the main graph in the portfolio, only the P&L generated by the investments made in DARWINs was being considered, which did not offer a 360º picture of the real evolution of your portfolio.

However, from now on, profitability will also take into account performance fees and investor rebates.

 

We remind you that the profitability of your portfolio is measured on equity:

Equity = available + invested capital (without leverage) + open P&L.

Total P&L = open and closed P&L + diversification rebates – Performance Fees (paid and withheld)

Profitability = Total variation of P&L / Equity

 

Why is this 2-D portfolio perspective important?

Although it may seem counterintuitive, in many cases, the evolution curve of the total P&L and return profitability in percentage terms, may not look alike at all.

This is due, in particular, to sudden changes in equity in an investor’s account due to significant deposits / withdrawals from the Wallet to the DARWINs Terminal and / or vice versa.

Example:

Suppose you deposit € 1000 in the DARWINs Terminal, invest in a portfolio of DARWINs and lose € 100:

  • Initial Equity = € 1000
  • Loss = € 100
  • Final Equity = € 900
  • Profitability = -10%

Then, you deposit 9100 € and earn 200 €:

  • Initial Equity = € 10,000
  • Profit = € 200
  • Final Equity = € 10200
  • Profitability = 2%

In this example, the % return since inception would be approximately -8%, while the earnings since inception would be +100 €.

 

Now, how much capital have you earned / lost since your first deposit in the DARWINs Terminal?

If you can give us an accurate answer within 30 seconds, we will be fully satisfied in Darwinex. However, do not even consider that we will rest on our laurels since we will continue working 24 x 7 to keep improving our innovative product.

We hope that the new functionality has been to your liking.

We’d love to hear your feedback.

Invest with caution!