The generation rights trade could make the losses change, which should be compensated by the trade participants, so the fair loss compensation principle should be established, it could not only help for confirming the traders' responsibilities, but also help the generation rights trade to develop very quickly. This paper thinks that the key of solution is how to allocate the incremental losses to each trade, but it's difficult to do because the electric system is coupled and nonlinear. In this paper, the characteristic of loss changing about generation rights trade is expounded firstly, and the loss components are traced based on the physical-flow, then the equations of incremental losses are derived based on the basic circuit theorems, by analyzing these equations, the incremental losses are allocated to the trades. The results can reflect the effect of trades on each line losses and the whole network losses, the physical and economic significance of them are obvious. Finally, an easy case verifies the correctness of the proposed method.