Realized vs Unrealized PnL

Realized PnL is the profit or loss you lock in when you close a trade: final, in your balance. Unrealized PnL is the paper gain or loss on a position that is still open.

The split matters because only realized PnL is money you actually have. Unrealized PnL changes with every price tick until you close, a forecast that can vanish before you ever act on it.

Realized PnL   = (Exit Price − Entry Price) × Size − Fees
Unrealized PnL = (Current Price − Entry Price) × Size

Both use the same PnL formula; the only difference is which price you plug in. Realized PnL uses your actual exit price, minus fees and funding. Unrealized PnL uses the current market price as a stand-in for the exit: nothing is locked in, it's a live estimate.

Example

You buy 2 ETH at $3,000. The price climbs to $3,400 while you hold. Your unrealized PnL is (3,400 − 3,000) × 2 = +$800, real on screen but not yet in your wallet. Sell one ETH at $3,400 and you realize $400 on that unit; the remaining ETH stays unrealized until you close it.

Why the split matters

Traders blow up accounts by treating unrealized gains as spendable and unrealized losses as not-yet-real. A clear separation keeps your scorecard honest: realized PnL measures decisions you have completed, while unrealized PnL flags risk still on the table. Tagging every trade by state, in a journal, lets you review closed performance without open positions distorting the picture.

Realized vs Unrealized PnL

Example

Why the split matters

Related Terms

TMM separates realized and unrealized PnL on every position automatically.