Profit and Loss (PNL): A calculation of a possible or actual profit or loss of a position on the exchange.

Unlike in traditional finance, where Profit and Loss is an income statement, in cryptocurrency Derivatives trading, PNL refers to a calculation of a possible profit or loss (unrealized PNL) and the actual profit or loss (realized PNL), based on the underlying asset price difference at the moment of opening and closing a position on the exchange.

BTCMEX offers Bitcoin Perpetual Contracts, so all the calculations are based on the BTC/USD price.

Realized PNL is a calculation of the actual profit or loss after the position is closed. Realized PNL is based on the difference between the average Entry Price and the average Exit Price.

Unrealized PNL is a calculation of a possible profit or loss, and is displayed while the position is open. For Unrealized PNL calculation, the Mark Price is used instead of the average Entry/Exit Price.

On BTCMEX the Unrealized PNL is displayed in the Position Details tab and shows the percentage of the current profit/loss with respect to the Margin.

Realized PNL for a Long position:

PNL = Number of Contracts x (1/Avg Entry Price – 1/Avg Exit Price)

For example, a trader buys 4,000 Perpetual Contracts at the BTC/USD Entry Price of 8,125, and the price rises to 8,300.

Realized Profit = 4000 x (1/8,125 – 1/8,300) = 0.0104 BTC

Realized PNL for a Short position:

PNL = Number of Contracts x (1/Avg Exit Price – 1/Avg Entry Price)

For example, a trader sells 4,000 Perpetual Contracts at the BTC/USD Entry Price of 8,125, and the price rises to 8,300.

Realized Loss = 4000 x (1/8,300 – 1/8,125) = – 0.0104 BTC

Unrealized PNL for a Long position:

PNL = Number of Contracts x (1/Avg Entry Price – 1/Mark Price)

For example, a trader buys 4,000 Perpetual Contracts at the BTC/USD Entry Price of 8,125, while the Mark Price is 8,500.

Unrealized Profit = 4000 x (1/8,125 – 1/8,500) = 0.02172 BTC

Unrealized PNL for a Short position:

PNL = Number of Contracts x (1/Mark Price – 1/Avg Entry Price)

For example, a trader sells 4,000 Perpetual Contracts at the BTC/USD Entry Price of 8,125, while the Mark Price is 8,500.

Unrealized Loss = 4000 x (1/8,500 – 1/8,125) = – 0.02172 BTC

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