# Contract Calculation

For a typical transaction of CFD, we have a set of states
$\mathbb{S}$
:
$\mathbb{S}=\{S_{open},\cdots,S_t,\cdots,S_{close}\}$
• $S_{open}$
is the state at the time which the position is opened.
• $S_{close}$
is the state at the time which the position is closed.
• $S_t$
is the state of each moment
$t$
during the holding period of position.
For each transaction with a given set
$\mathbb{S}$
$m$
at
$S_{open}$
and withdraw the remaining equity
$e$
at
$S_{close}$
.
The amount of remaining equity
$e$
is determined by
$m$
,
$S_{open}$
,
$S_{close}$
and
$S_{liquidation}$
, which can be described as follows:
$e=\begin{cases} \boldsymbol{f}(m,S_{open},S_{close}),&S_{liquidation}\notin\mathbb{S}\\ \\ 0,&S_{liquidation}\in\mathbb{S} \end{cases}$
• $S_{liquidation}$
means the state that the liquidation is triggered.
To illustrate, if the liquidation is not triggered during the holding period of position, then
$e$
shall be a function of
$m$
,
$S_{open}$
and
$S_{close}$
, while if the liquidation is triggered during the holding period of position, then
$e=0$
.
Since
$m$
,
$S_{open}$
,
$S_{close}$
and
$S_{liquidation}$
are always known for any given moment of a position,
$e$
can be calculated accordingly.
The calculation process of remaining equity
$e$
is called contract calculation.