Profit and Loss
You are highly recommended to read this guide in order 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.
Example 3: Trading Fees
At BaseFEX, all trading fees are calculated by realized PNL.
You bought BTC/USD Perpetual Contract, but the market has not changed. Your unrealized PNL is 0, but your realized PNL is negative, because you paid a taker fee when you bought the BTC/USD Perpetual Contract.
If you had placed a passive limit order, you would be marked as a maker when the order was executed. Then you would have been paid a rebate on the trade. Your unrealized PNL would be 0 and your realized PNL would be positive.
Example 4: Realized PNL Accounting
At BaseFEX, your realized PNL will be calculated due to different cases. It depends on whether you want to reduce the size of your existing position or close it entirely.
If you have an open position with a realized profit of 10 BTC, then you will see this amount shown on the Open Positions.
If you completely close the same position and receive a profit of 10 BTC, then this amount will be shown on the Closed Positions.
If you open a new position on the same contract, your realized PNL will be reset to 0 BTC on the Open Positions. The Realized PNL resulting from a partial closure of this new position will be shown on the Open Positions as well.
If you completely close this new position, any realized PNL will be added to the symbol on the Closed Positions.