• # Profit and Loss

You are highly recommended to read this guide to understand what unrealized PNL and realized PNL are.

## Example 1: Buying and Selling

You buy long 1,000 BTC/USD Perpetual Contracts with an entry price of \$1,000. The mark price of BTC/USD is currently \$1,250.

Your unrealized PNL is based on the difference between your average entry price and the mark price.

``Unrealized Profit = ( \$1 / \$1,000 - \$1 / \$1,250 ) * 1,000 = 0.20 BTC``

The last price of BTC/USD is \$1,500. Yet we use the mark price instead of the last price to calculate the unrealized PNL. You can check Fair Price Marking for further explanation.

You want to sell 500 BTC/USD Perpetual Contracts at \$1,500 and earn your profit.

Then your realized PNL is based on the difference between your average entry price and the price where you sell BTC/USD.

``Realized Profit = (\$1 / \$1,000 - \$1 / \$1,500 ) * 500 = 0.17 BTC``

Realized PNL is based on where you can actually buy or sell your position, which is normally not the mark price. If you had sold your 500 Perpetual Contracts at the mark price of \$1,250, then you would have a realized profit of 0.10 BTC.

## Example 2: Funding Fees

At BaseFEX, you can pay or receive your funding fees during the trading day. You can check Perpetual Contract Overview for detailed explanation.

There is a funding fee in every 8 hours, and the rate is 1%, paid from the buyers to the sellers.

If you Buy/Long 100 BTC worth of BTC/USD Perpetual Contract and the position has no realized PNL. Then you have to pay 1 BTC during the funding time, and your realized PNL will be -1 BTC after the funding fee has been paid.

If you are short 100 BTC worth of BTC/USD Perpetual Contract, you will receive 1 BTC, and your realized PNL will be 1 BTC.