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

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/fa/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:

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<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
* **Unrealized PnL (Long)** = SizeUSD \* Multiplier \* (BidPrice - OpenPrice)/OpenPrice
* **Unrealized PnL (Short)** = SizeUSD \* Multiplier \* (OpenPrice - AskPrice)/OpenPrice

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

**EXAMPLE:**

Parameters of an OPEN position: Open position, 0.01 BTC, opened with Limit order, Long, OpenOrderCommission, Funding charged 1 time.

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

* OpenOrderCommission = SizeBTC \* MakerFee = 0.01 \* 0.001 = 0.00001
* Funding = SizeBTC \* FundingFee = 0.01 \* 0.005 = 0.00005

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

* Realized PnL = OpenOrderCommission - Funding = -0.00001 - 0.00005 = - 0.00006
* Unrealized PnL (Long) = SizeUSD \* Multiplier \* (BidPrice- OpenPrice)/OpenPrice = 100 \* 0.0001 \* (11000 - 10000)/10000 = 0.001

**Finally**, the last step is calculating PnL. As seen above, the Realized PnL= 0.00006 and Unrealized PnL = 0.001;

* PnL(Long) = Realized PnL + Unrealized PnL = -0.00006 + 0.001 = 0.00094

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<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:

* **Unrealized PnL (Long)** = SizeUSD \* Multiplier \* (ClosePrice- OpenPrice)/OpenPrice
* **Unrealized PnL (Short)** = SizeUSD \* Multiplier \* (OpenPrice - ClosePrice)/OpenPrice
* **CloseOrderCommission** = TakerFee \* SizeBTC

**EXAMPLE:**

Parameters of a CLOSED position: Сlosed position, opened at Market, closed at with a Market order, Long, Funding charged 1 time

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

* CloseOrderCommission = TakerFee \* SizeBTC = 0.002 \* 0.01 = 0.00002 **Secondly**, we must calculate Realized PnL and Unrealized PnL:
* Realized PnL = OpenOrderCommission - Funding = -0.01*0.002 - 0.01*0.005 = -0.00007
* Unrealized PnL (Long) = SizeUSD \* Multiplier \* (ClosePrice - OpenPrice)/OpenPrice = 100 \* 0.0001 \* (11000-10000)/10000 = 0.001 **Thirdly**, the final step is calculating PnL. As seen above, the Unrealized PnL= 0.00006 and Realized PnL = 0.001:
* PnL = Realized PnL + Unrealized PnL - CloseOrderCommission = - 0.00007 + 0.001 - 0.00002 = 0.00091

</details>

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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 %}