What Is PnL in Trading? Realized vs Unrealized PnL
PnL means profit and loss. Learn realized vs unrealized PnL, how fees and funding change it, how to calculate PnL % and how PnL World scores traders by it.
PnL (also written P&L or PNL) stands for profit and loss — the money a trade, an account or a strategy has made or lost over a period. It is the most basic number in trading, and the one every other statistic is built on.
This guide explains the two kinds of PnL, how to calculate it in money and in percent, what quietly eats into it, and how PnL World — a platform built around this one number — uses it to decide who wins a trading tournament.
PnL in one sentence
PnL = what your position or account is worth now − what it was worth when you started, after costs.
If you buy 1 ETH at 2,000 and it is now 2,100, your PnL on that position is +100 before fees. If it falls to 1,900, your PnL is −100.
Realized vs unrealized PnL
| Realized PnL | Unrealized PnL | |
|---|---|---|
| What it is | Profit or loss from positions you have closed | Profit or loss on positions that are still open |
| Is it final? | Yes — it is locked into your balance | No — it moves with every price tick |
| Also called | Closed PnL, booked PnL | Open PnL, floating PnL, paper PnL |
| Where you see it | Balance, trade history | Equity, open positions panel |
Realized PnL becomes part of your balance the moment a position is closed. Unrealized PnL is what you would get if you closed right now. Your equity is balance plus unrealized PnL — the honest answer to "how much is my account worth at this moment?"
A common mistake is to look only at realized PnL. A trader who closes every winner quickly and holds every loser open can show a beautiful realized PnL while the account sinks. Equity tells the truth; that is why serious scoring uses it.
How to calculate PnL
Long position: PnL = (exit price − entry price) × quantity
Short position: PnL = (entry price − exit price) × quantity
Example — a short of 0.5 BTC at 60,000, closed at 58,000: (60,000 − 58,000) × 0.5 = +1,000
PnL % (return)
Money PnL alone does not let you compare traders, because a 1,000 profit means something very different on a 10,000 account than on a 1,000,000 account. So results are compared in percent:
PnL % = PnL ÷ starting capital × 100
A +1,000 result on a 100,000 account is +1%.
PnL % with leverage
On a leveraged position, PnL % is often shown against the margin you posted, not the whole account. A 1% move on a 10× position is roughly +10% on margin — but still only the actual money gained relative to the account. When you compare traders, always compare return on the account, not return on margin, or leverage will make small results look huge.
What quietly eats your PnL
- Trading fees. Every entry and exit costs a fee. Market orders usually pay the higher taker fee; resting limit orders often pay the lower maker fee. A strategy that trades very often can be profitable before fees and losing after them.
- Funding. Perpetual futures charge or pay a periodic funding rate between longs and shorts. Hold a position through funding and it is added to or taken from your PnL.
- Slippage. A large market order can fill at a worse average price than the last trade you saw.
- Spread. The gap between the best bid and best ask is a cost on every round trip.
Net PnL — after all of these — is the only PnL that counts.
Gross vs net PnL
Gross PnL is price movement only. Net PnL subtracts fees and funding. Screenshots on social media almost always show gross PnL on a single position, often in percent of margin. That is one reason a single screenshot proves very little — see verified trading track record.
PnL vs ROI vs drawdown
- PnL — how much you made or lost (in money or %).
- ROI — return on investment; for a trading account it is the same as PnL %.
- Max drawdown — the deepest fall from a peak in equity during the period. It shows how much pain was taken to reach the result.
Two traders can finish at +8%. One got there smoothly; the other fell 40% first and recovered. Their PnL is equal; their drawdown is not.
How PnL World uses PnL
PnL World is named after this number because a tournament here is decided by it. In every tournament:
- Every trader starts with the same bankroll of 100,000 Credits, trades live Binance prices, and pays the same fees and funding as on an exchange.
- Result = (result equity − starting bankroll) ÷ starting bankroll. Result equity includes closed trades, fees, funding and every open position counted as if closed now at the mark price, including the exit fee. Holding a loser open does not hide it.
- Place = final result. The highest PnL % wins.
- Ties are broken by the smaller max drawdown, then by earlier entry.
- An account that a liquidation leaves at 10% or less of the starting bankroll is marked Liquidated and ranks below every other finisher.
- Finishing places then earn points in the PnL World Rating (PWR), so one good result builds a permanent, public record.
Full details are in the official rules and in how tournament results are scored.
FAQ
What does PnL stand for? Profit and loss. "PnL", "P&L" and "PNL" all mean the same thing.
Is unrealized PnL real money? Not yet. It becomes realized only when you close the position — and it can disappear before that.
What is a good PnL? It depends on the period and the risk taken. A small positive PnL with a shallow drawdown is often a stronger result than a large one reached through a deep drawdown.
Why is my PnL negative right after I open a trade? Because the entry fee and the spread are paid immediately, so a new position starts slightly below zero.
How do I compare my PnL with other traders? Use PnL % on the same starting capital, over the same period, under the same rules. That is exactly what a trading tournament provides.
PnL World tournaments are simulated: trades are executed against live market data, but no real-money positions are opened on any exchange. Nothing here is financial advice.
Next: How trading tournaments work · How tournament results are scored · Competitive trading glossary