PnL and Entry Price

PnL Types

• Unrealized PnL: marked to current mark price; fluctuates with market movement
• Realized PnL: crystallized on position close, funding settlement, fee deduction, or liquidation

Unrealized PnL

For a long position:

$$\text{Unrealized PnL} = (\text{Mark Price} - \text{Entry Price}) \times \text{Position Size}$$

For a short position:

$$\text{Unrealized PnL} = (\text{Entry Price} - \text{Mark Price}) \times \text{Position Size}$$

Realized PnL Components

Realized PnL comprises:

• Trade PnL on position close
• Execution fees (maker/taker)
• Funding payments and receipts
• Liquidation outcomes (if applicable)

Entry Price Updates

When adding to an existing position, entry price is recalculated as a size-weighted average:

$$\text{New Entry} = \frac{(Q_{\text{existing}} \times P_{\text{existing}}) + (Q_{\text{fill}} \times P_{\text{fill}})}{Q_{\text{existing}} + Q_{\text{fill}}}$$

Where $Q$ is quantity and $P$ is price for the existing position and the new fill respectively.

Example

Long position:

• Buy 0.10 BTC at 50,000
• Buy 0.20 BTC at 52,000

Entry:

$$\frac{(0.10 \times 50{,}000) + (0.20 \times 52{,}000)}{0.30} = 51{,}333.33$$

If mark is 52,100:

$$(52{,}100 - 51{,}333.33) \times 0.30 = 230.00$$

Unrealized PnL is approximately +230 USDC.

Related

• Mark Price
• Fees
• Funding