Understanding your real profit after fees

The formula

For a completed sell, real profit is: (sell rate minus your cost basis) times the quantity, minus the fee converted at the trade’s own rate. Nothing more, nothing less. Every term matters: the rate you sold at, the true average rate you acquired at, the size, and the fee the platform took in crypto.

The fee detail trips people up: platform fees are charged in the token, not in your currency. A 1 USDT fee on a trade at 1,400 is 1,400 of local currency off your profit, and it must be valued at that trade’s rate, not at today’s.

Cost basis is where the lies hide

Most merchants know their sell rates precisely and their acquisition costs vaguely. That asymmetry always flatters the profit number. If you bought 5,000 USDT at 1,360 and 5,000 at 1,392, your cost basis is 1,376, and selling at 1,390 is a 14-per-unit business, not a 30-per-unit business.

Keep your cost basis honest with two habits: recompute the weighted average every time you restock, and when your average changes, apply the new rate from that date forward only. Rewriting history with today’s cost basis silently corrupts every past number you have.

Mistakes that inflate the number

If your profit feels better than your bank balance, one of these is usually why:

• Counting turnover as earnings: moving 50 million of volume at a 1.2 percent margin is 600,000 of gross profit, not 50 million.
• Ignoring cancelled and disputed orders: a cancelled order is not profit, and a lost dispute is negative profit that must be recorded.
• Skipping the fee conversion: fees in token terms look tiny until you multiply by the rate and by hundreds of trades.
• Using the latest buy price as cost basis: your newest batch is not your average.
• Mixing currencies: if you trade in more than one fiat currency, totals must be kept per currency or converted deliberately; adding shillings to naira produces nonsense.

Measure weekly, decide monthly

Check your realized margin per USDT weekly, and make business changes (rates, limits, payment methods, hours) monthly based on the trend, not on one loud day. A ledger that computes this from your actual completed orders, against a dated cost-basis history, removes both the arithmetic and the self-deception.