> For the complete documentation index, see [llms.txt](https://magnamarkets.gitbook.io/en/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://magnamarkets.gitbook.io/en/digital-currencies/transaction-rules.md).

# Transaction Rules

## *How to trade digital currency profitably?* 

Virtual coin contracts are two-way trades, you can go long (buy up) or short (buy down). Simply put, if you think the price will climb, you buy; if you think it will fall, you sell. If the direction is correct, you earn the spread in between.

Calculated as follows: Total profit/loss = (Ask price - Bid price) x contract units x number of lots traded ± overnight interest

Note: No overnight interest is required to close a position on the day it is opened; the actual overnight interest is shown on the platform.

*Transaction Case One* 

Buy 1 lot of Bitcoin/USD through the platform with 1 contract unit per lot at a bid price of $18000 and close the position at the ask price of $17000 on the same day. 

Total P/L = (Ask price - Bid price) x Contract units x Lots traded ± Overnight interest = (18000-17000) x 1 x 1 ± 0 = $1000

*Transaction Case Two*

Sell 1 lot of Ether/USD through the platform with 1 contract units per lot at $1300 and close the position at the bid price of $1200 on the same day. 

Total P\&L = (Ask price - Bid price) x contract units x number of lots traded ± overnight interest = (1300 - 1200) x 1 x1±0 = $100

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