Profit and loss (PnL) refers to the actual gains or losses generated from trading activities. It is determined by the price difference between the opening and closing of a position. In futures trading, PnL is divided into two categories:
Unrealized PnL: The potential profit or loss of an open position, calculated using the current fair mark price. This value fluctuates in real-time as the mark price changes.
Realized PnL: The actual profit or loss incurred after closing a position, calculated based on the difference between the entry price and exit price.
PnL = position size × (exit price − entry price)
For example:
Let’s assume you open a long position with the BTC/USDT futures trading pair for 0.01 BTC at an entry price of 70,000 USDT and close the position at 80,000 USDT.
Ignoring transaction fees, the realized PnL is:
0.01 BTC × (80,000 USDT − 70,000 USDT) = 0.01 × 10,000 USDT = 100 USDT (Profit)
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The WEEX Team
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