What does profit and loss analysis consist of?

-> Profit and loss analysis is divided into three parts, namely "My Earnings" // "P&L Calendar" // "Profit and Loss Distribution."

-> "My Earnings " => Used to view the changes of client’s personal securities account in "Yield" // "P&L" // "Net Account Value"

-> " P&L Calendar" => Used to view the profit and loss situation of client’s personal securities account for each day of the current month or each month of the current year.

-> "Profit and Loss Distribution" => Used for tracking the cumulative gains and losses of client investments in different markets // The top five investment products that generated profits or the top five investment products that incurred losses.

Meaning of various calculations under different filtering criteria.

A) Filter: All

(1) Net Account Value Curve

Representing the account net asset at 20:00 Eastern Time

Net asset value of the account = Account holdings market value (e.g. US stock market value + HK stock market value + A-share market value) + Account cash balance (e.g. US dollar cash + Hong Kong dollar cash + Renminbi cash) + Pending Funds

Pending Funds: Funds for IPO subscription, pending funds for rights issues, etc.

(2) P&L Curve

Each point on the curve represents the cumulative account profit and loss up to that day of the selected date.

As shown in the above image, the selected time interval is from 2024/3/18 to 2024/3/22, with a cumulative profit and loss of HK$1,838.68. This indicates that during the period from 2024/3/18 to 2024/3/22, the account incurred a cumulative profit of HK$1,838.68. Clicking on 2024/3/20 shows +1,853.07, indicating that from 2024/3/18 to 2024/3/20, the account accumulated a profit of HK$1,853.07.

Cumulative Profit and Loss = Σ daily profit and loss of the account within the period

The cumulative profit and loss amount is the sum of daily profits and losses within the selected time range. Following the example provided, the cumulative profit and loss amount of HK$1,838.68 is the total of daily profits and losses from 2024/03/18 to 2024/03/20. The account's cumulative profit and loss of HK$1,838.68 is the total of daily profits and losses from 2024/3/18 to 2024/3/22.

To avoid the impact of exchange rate conversion, it is necessary to first calculate the daily profits and losses for each currency, and then sum them up according to the daily exchange rates to obtain the account's daily profit and loss. To avoid the impact of delayed updates in mutual fund net asset values, the profits and losses of mutual funds need to be calculated separately, and then added to the profits and losses of the account excluding the funds, in order to calculate the account's overall profit and loss for the day. (The principle of summing up the daily profit and loss calculation of the account is: calculating by currency, separately calculating for funds and non-funds)

Account daily profit and loss = Hong Kong dollar daily profit and loss + US dollar daily profit and loss + Renminbi daily profit and loss

Hong Kong dollar daily profit and loss = Hong Kong dollar excluding fund daily profit and loss + Hong Kong dollar fund daily profit and loss

Hong Kong dollar excluding fund daily profit and loss = Current Hong Kong dollar excluding fund net assets - Initial Hong Kong dollar excluding fund net assets - Hong Kong dollar net inflow on the day - Hong Kong stock fund net inflow on the day

Hong Kong dollar fund daily profit and loss = Individual stock current market value - Individual stock initial market value + Individual stock sell amount on the day - Individual stock buy amount on the day - Daily expenses (e.g. platform fee / exchange fee) + Daily company event cash net inflow

Net inflow can be understood as net investment amount, representing customer input cost, not included in profit and loss, and need to be deducted.

Account net inflow on the day = Deposit on the day - Withdrawal on the day + Currency exchange inflow - Currency exchange outflow + Daily transfer-in - Daily transfer-out + Stock dividend on the day + Cash dividend on the day + Fund transfer-in - Fund transfer-out - Subscription product charges + Subscription product refunds

(3) Rate of Return Yield Curve

Simple Weighted Return:

Simple Weighted Return = Cumulative Profit or Loss for the Period / (Initial Net Asset Value + Net Inflows for the Period)

Here, "Initial Net Asset Value" represents the net asset value at the beginning of the first day within the selected time range. In the example, the selected time range is from 2024/3/18 to 2024/3/22, so the calculation of the return rate at each point in time during this period is based on the net asset value at the beginning of 2024/3/18 (i.e., the end of day net asset value on 2024/3/17).

The Simple Weighted Return considers the net inflows of funds and stocks but assumes that they occur at the beginning of the period. When there are significant inflows and outflows of funds, it may lead to an underestimation of positive returns and an overestimation of negative returns, making it less accurate.

Time Weighted Return:

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

Where R = Profit or Loss for the Day / (Net Asset Value at the Beginning of the Day + Net Inflows for the Day)

Time-weighted return considers the time value of funds and is a type of return similar to the geometric mean return, using a compound interest approach to calculating returns. The time-weighted return first calculates the daily return and then computes the cumulative return from the beginning to the end of the period, thereby to some extent eliminating the impact of cash flow changes on the return. However, time-weighted return treats daily return performances equally without considering the weight of the investment amount, so it is possible for users to incur losses yet calculate a positive return. In other words, the return and the overall return during the period may not be consistent.

Cash Weighted Return:

Cash Weighted Return = Cumulative Profit or Loss for the Period / (Initial Net Asset Value + Weighted Net Inflows for the Period)

The Weighted Net Inflows for the Period = ∑ (Net Inflow for Day t * Weight)

Where Weight for the Net Inflow for Day t = (T - t) / T = Number of days the net inflow stays within the period / Total number of days in the period

In the context of the example provided, to calculate the Cash Weighted Return for the period from 2024/3/18 to 2024/3/22, assuming there is a net inflow of HK$200 on 2024/3/18, the weight for that inflow would be (5-0) / 5; on 2024/3/19, if there is a net inflow of HK$500, the weight for that inflow would be (5-1) / 5.

For the period from 3/18/2024 to 3/22/2024, the Weighted Net Inflows = 200 * (5-0) / 5 + 500 * (5-1) / 5 = 600

The Cash Weighted Return considers the net inflows of funds and stocks and takes into account the impact of varying positions during different time periods on the return rate. It can calculate negative returns during periods of losses and positive returns during profitable periods.

(4) P&L Calendar

On the P&L Calendar, it shows the sum of profit or loss for each day across all assets, which may differ from the account's profit or loss. For example, fees charged at the account level such as financing fees will make the account's profit or loss smaller than the total profit or loss of the assets.

Daily Profit or Loss on the Calendar = Sum of all profit or loss for that day

Asset's Daily Profit or Loss = Current market value of the asset - Initial market value of the asset + Amount sold on that day - Amount bought on that day + Amount transferred out on that day - Amount transferred in on that day - Stocks received on that day - Fees on that day + Net cash flow from company events on that day

Note: Stocks and options are counted separately

1. Profit and Loss Distribution

The Profit and Loss Distribution displays the cumulative profit and loss ranking of all subjects in each market from history until now. As long as a position has been held, it will be shown here. (However, the historical data here refers to the day the business started, which will be set at a certain day after the profit and loss business online. Due to the lack of data before the start date, the profit and loss of subjects before the start date will not be included in the calculation.)

The Profit/Loss Distribution data is updated only until 9:00 AM Hong Kong time during winter time (8:00 AM during summer time).

Cumulative profit/loss from trading = Sum of daily profit or loss from trading

Asset's Daily Profit/Loss = Current market value of the asset - Initial market value of the asset + Amount sold on that day - Amount bought on that day + Amount transferred out on that day - Amount transferred in on that day - Stocks received on that day - Fees on that day + Net cash flow from company events on that day

B) Filter: By Category

In Filter: By Category, unlike the Filter: All, it does not display net assets or returns. Additionally, the calculation method for cumulative profit or loss is different:

Cumulative profit or loss for a certain category = Sum of daily profit or loss for that category

C) Filter: By Scene

In Filter: By Scene, it only shows realized profit or loss under that specific scenario.

(1) Quick Trading Mode - Realized profit or loss generated from closing orders using the quick trading function

Long position closing (Sell to close):

Daily realized profit in Quick Trading Mode = ∑(closing price - average purchase price) * quantity of closing trades

Short position closing (Buy to close):

Daily realized profit in Quick Trading Mode = ∑(average purchase price - closing price) * quantity of closing trades

Cumulative realized profit in Quick Trading Mode = Sum of daily realized profit in Quick Trading Mode

(2) Expiry Options Mode - Profit or loss from closing options on the expiry day of the options

Long position closing (Sell to close):

Daily realized profit for a single expiry option = ∑(closing price - average purchase price) * quantity of closing trades

Short position closing (Buy to close):

Daily realized profit for a single expiry option = ∑(average purchase price - closing price) * quantity of closing trades

Cumulative realized profit for expiry options = Sum of daily realized profit for a single expiry option

Note:

1. There is a starting date for profit or loss analysis, the starting date refers to the day when the profit and loss calculation begins.

2. Explanation for fund profit or loss calculation: Delay in net asset value output may lead to a delay in fund profit or loss calculation, varying by the number of days delayed.

3. Profit or loss analysis is for reference only. In case of discrepancies in values, refer to the closing statement.