Know-How of Futures Trading: What Is Position PNL?

KuCoin Futures now supports two types of PNL: Unrealised PNL and Realised PNL.

 

1.Unrealised PNL

Unrealised PNL is also called floating PNL, which is the profit and loss of your current positions calculated based on the price gap between the average entry price and the mark price. By default, the unrealised PNL will change with the mark price.

 

Note: For convenience, the “Mark Price” will be referred to as “M” and the “Average Entry Price” will be referred to as “E” in the description below.

 

Unrealised PNL of USDT-Margined Contract

Buy: Unrealised PNL = (M - E) * Position size * Contract Value

Sell: Unrealised PNL = (E - M) * Position size * Contract Value

 

E.g.: Take BTC Perpetual/USDT (1 lot = 0.001 BTC) as an example, if you sell 100 lots of BTC with the average entry price of $5,000, and the mark price is $5,100, then the unrealised PNL = (5,100 - 5,000) * 100 * 0.001 = 10 USDT.

 

Unrealised PNL of COIN-Margined Contract

Buy: Unrealised PNL = (1/E - 1/M) * Position size * Contract Value

Sell: Unrealised PNL = (1/M - 1/E) * Position size * Contract Value

 

E.g.: Take BTC Perpetual/USD (1 lot = 1 USD) as an example, if you sell 100 lots of BTC with the average entry price of $5,000, and the mark price is $3,000, then the unrealised PNL = (1/3,000-1/5,000) * 100 * 1 = 0.0013 USDT.

 

  1. Realised PNL

Realised PNL is also the PNL of partially closed positions or reduced positions, including the position PNL, trading fees as well as funding fees associated with the trading. The position PNL is calculated based on the price gap between the entry price and the close price.

 

Note: For better understanding, the “Close Price” will be referred to as “C” and the “Average Entry Price” will be referred to as “E” in the description below.

 

Realised PNL of USDT-Margined Contract

Buy/Long: Realised PNL = (C – E) * Position size * Contract Value

Sell/Short: Realised PNL = (E – C) * Position size * Contract Value

 

E.g.: Take BTC Perpetual/USDT (1 lot = 0.001 BTC) as an example, suppose you go long 100 lots of BTC at the average entry price of $5,000 and close by $5,100, then the realised PNL = (5,100 – 5,000) * 100 * 0.001 = 10 USDT.

 

Realised PNL of COIN-Margined Contract

Buy/Long: Realised PNL = (1/E -1/C) * Position size * Contract Value

Sell/Short: Realised PNL = (1/C - 1/E) * Position size * Contract Value

 

E.g.: Take BTC Perpetual/USD (1 lot = 1 USD) as an example, suppose you go short 100 lots of BTC at the average entry price of $5,000 and close at the price of $3,000, then the realised PNL = (1/3000 – 1/5000) * 100 *1 = 0.0013 USDT.

 

  1. Why is the displayed position PNL positive whereas the PNL history shows that it is negative?

 

1) That is because the trading fees and funding fees are included when calculating the PNL of closed positions. The details are as follows:

 

 

Unrealised PN.

Realised PNL

Position PNL

Fees for opening positions

×

Funding fees for holding positions

×

Fees for closing positions

×

Estimated/Final PNL

Based on mark price

Based on the close price, deducted trading fees, and funding fees.

 

2) Unrealised PNL shown in the "Position" panel has the following characteristics:

 

Referenced Screenshot:

mceclip2.png

  • It is the estimated PNL, not the final one.
  • The estimated PNL is calculated based on the mark price. If the market fluctuates, the unrealised PNL will also change.
  • Unrealised PNL excludes all the trading fees and funding fees.
  • The way to calculate the unrealised PNL is mentioned above.

 

3) Realised PNL (PNL of closed positions) has the following characteristics:

 

Referenced Screenshot:

mceclip3.png

  • As shown in the figure above, the circled part is the realised PNL of the position.
  • The orders of closed positions will be settled by the avg. close price. Check “Trade History” for more information.
  • Realised PNL includes ALL trading fees and the settled funding fees involved in the opening, holding and closing of the position.
  • The calculation formula of PNL is listed above.

 

Risk Warning: Please pay attention to the risk control of Futures trading. It is recommended that newbies control the leverage within 5x and set the Take Profit and Stop Loss on your position.

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