# Profit and Loss (PNL)

**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