# Profit & Loss (PnL) and How It's Calculated

{% embed url="<https://youtu.be/zcF1lrOCVV8>" %}

The **Profit and Loss (PnL)** indicator reflects the Profit or Loss of a position. PnL is calculated in 2 different ways, depending on if a position is still currently Open or if it has already been Closed.

For **open** positions Realized PnL and Unrealized PnL are taken into account. The potential profit from the deal refers to the Unrealized PnL. Realized PNL in open positions equals already paid commissions (i.e. [trade fees and funding](https://help.margex.com/help-center/margex/trading-conditions/margex-fees)).

* *PnL is not reflected in Open positions. It can be calculated by adding Realized PnL + Unrealized PnL.*
* *Calculating Unrealized PnL of Open positions requires the use of AskPrice and BidPrice, while calculating Unrealized PnL of Closed positions requires the use of ClosePrice*

Below are examples of calculation of PnL in Open Positions and in Closed Positions:

<details>

<summary><strong>How to calculate PnL in OPEN positions</strong></summary>

The general formulas for calculating PnL of OPEN positions:

**PnL = Realized PnL + Unrealized PnL**, where:

* **Realized PnL** = -OpenOrderCommission - Funding, where
  * OpenOrderCommission = (MarginCol \* Leverage) \* Maker or Taker fee%
  * Funding = (MarginCol \* Leverage) \* FundingFeeRate%
* **Unrealized PnL (Long)** = MarginCol \* Leverage \* (CurrentAsk - OpenPrice) / OpenPrice
* **Unrealized PnL (Short)** = MarginCol \* Leverage \* (OpenPrice - CurrentBid) / OpenPrice

Note: CloseOrderCommision is NOT included in PnL until a position has been closed.

**EXAMPLE:**

Parameters of an OPEN position:

* Direction: Long
* Order Size: 0.1 BTC
* Leverage: x100 (-> **Margin = 0.001 BTC**)
* Open Order: Limit
* Funding fee charged: 1 time

**First,** we must calculate the OpenOrderCommission and Funding:

* OpenOrderCommission = (MarginCol \* Leverage) \* MakerFee% = (0.001 \* 100) \* 0.019% = 0.000019
* Funding = (MarginCol \* Leverage) \* FundingFeeRate% = (0.001 \* 100) \* 0.12% = 0.00012

**Next,** must calculate Realized PnL and Unrealized PnL:

* Realized PnL = -OpenOrderCommission - Funding = -0.000019 - 0.00012 = -0.000139
* Unrealized PnL (Long) = MarginCol \* Leverage \* (AskPrice- OpenPrice)/OpenPrice = (0.001 \* 100) \* (11000 - 10000)/10000 = 0.01

**Finally**, the last step is calculating PnL. As seen above, the Realized PnL= -0.000139 and Unrealized PnL = 0.01;

* PnL(Long) = Realized PnL + Unrealized PnL = -0.000139 + 0.01 = 0.009861

</details>

<details>

<summary><strong>How to calculate PnL in CLOSED positions</strong></summary>

The general formulas for calculating PnL of CLOSED positions:

**PnL = Realized PnL + Unrealized PnL - CloseOrderCommission** , where:

* **Realized PnL** = -OpenOrderCommission - Funding, where
  * OpenOrderCommission = (MarginCol \* Leverage) \* Maker or Taker fee%
  * Funding = (MarginCol \* Leverage) \* FundingFeeRate%
* **Unrealized PnL (Long)** = MarginCol \* Leverage \* (ClosePrice- OpenPrice)/OpenPrice
* **Unrealized PnL (Short)** = MarginCol \* Leverage \* (OpenPrice - ClosePrice)/OpenPrice
* **CloseOrderCommission** = (MarginCol \* Leverage) \* TakerFee%

**EXAMPLE:**

Parameters of a CLOSED position:

* Direction: Long
* Order Size: 0.1 BTC
* Leverage: x100 (-> **Margin = 0.001 BTC**)
* Open Order: Market
* Close Order: Market
* Funding fee charged: 1 time

**Firstly**, we must calculate the CloseOrderCommission:

* CloseOrderCommission = (MarginCol \* Leverage) \* TakerFee = (0.001 \* 100) \* 0.06% = 0.00006

**Secondly**, we must calculate Realized PnL and Unrealized PnL:

* Realized PnL = -OpenOrderCommission - Funding = -((MarginCol \* Leverage) \* TakerFee%) - ((MarginCol \* Leverage) \* FundingFeeRate%) =  -((0.001 \* 100) \* 0.06%) - ((0.001 \* 100) \* 0.12%)  = -(0.1 \* 0.06% ) - (0.1 \* 0.12%) = -0.00006 - 0.00012 = -0.00018
* Unrealized PnL (Long) = MarginCol \* Leverage \* (ClosePrice - OpenPrice)/OpenPrice = 100 \* 0.001 \* (11000-10000)/10000 = 0.01

**FInally**, the last step is calculating PnL. As seen above, the Unrealized PnL = 0.01, Realized PnL =  -0.00018, and CloseOrderCommission = 0.00006:

* PnL = Realized PnL + Unrealized PnL - CloseOrderCommission = -0.00018 + 0.01 - 0.00006 = 0.00976

</details>

{% hint style="success" %}
The PnL for open and closed positions is calculated automatically and reflected in the Open Positions and Position History sections of the [Trade](https://margex.com/app/trade) page for your convenience.
{% endhint %}


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://help.margex.com/help-center/leverage-trading-guide/how-leverage-works/pnl-calculation.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.