Example 1, Buying and Selling
John is long 1,000 BTCUSD contracts with an average entry price of $1,000. The mark price of BTCUSD is currently $1,250.
John’s unrealised PNL is based on the difference between his average entry price and the mark price.
Unrealised Profit = ($1/$1,000 - $1/$1,250) * 1,000 = 0.20 BTC
The last price of BTCUSD is $1,500. However for the calculation of unrealised PNL, the mark price is used not the last price. To understand why, please read Fair Price Marking.
John decides to sell 500 BTCUSD contracts at $1,500 and realise some profit.
John’s realised PNL is based on the difference between his average entry price and the price at which he sells BTCUSD.
Realised Profit = ($1/1,000 - $1/$1,500) * 500 = 0.17 BTC
Realised PNL is based on where you can actually buy or sell your position, which in most cases is not the mark price. If John had sold his 500 contracts at the mark price of $1,250, he would have a realised profit of 0.10 BTC.
Example 2 Funding Fees
AMANPURI EXCHANGE has a type of derivative contract called a Perpetual Contract. Buyers and sellers of perpetual contacts pay and receive funding fees periodically throughout the trading day. To learn more, please read the Perpetual Contracts Guide.
John is trading BTCUSD, which is a perpetual contract. Every 8 hours, there is a funding fee. The funding fee is currently 1%, and is paid from buyers to sellers.
John is currently long 100 BTC worth of BTCUSD. The position has no realised PNL. It is funding time and John must pay 1 BTC because he is long BTCUSD. After the funding fee has been paid, John’s realised PNL is now -1 BTC.
If John had been short 100 BTC worth of BTCUSD instead, he would have received 1 BTC. His realised profit would then be 1 BTC instead of -1 BTC.
Example 3 Trading Fees
All trading fees are accounted for through realised pnl.
John bought BTCUSD. The market has not moved. His unrealised PNL is 0, but his realised PNL is negative. John’s realised PNL is negative because he paid a taker fee when he bought BTCUSD.
If John had placed a passive limit order, he would be classified as a maker once the order was executed. As a maker, John would have been paid a rebate on the trade. In that situation, his unrealised PNL would be 0 and realised PNL positive.
Example 4 Realised PNL Accounting
Realised PNL is displayed in different locations on the AMANPURI EXCHANGE trading dashboard depending on whether you are merely reducing the size of an existing position, or closing it entirely.
If you have an open positions with a realised profit of 10 BTC, this amount will show on the Positions tab.
If you completely close the same position and you realise a profit of 10 BTC, this 10 BTC will be shown on the Fills tab.
If you then create a new position on the same contract, realised PNL will be reset to 0 BTC on the Positions tab. Realised PNL resulting from a partial closure of this new position will be displayed on the Positions tab.
If you then completely close this new position, any realised PNL will be added to that symbol on the Fills tab.