# Realized and unrealized PnL

> Profit and loss, or PnL, measures how a position’s value has changed. Unrealized PnL is the estimated gain or loss on exposure that remains open, usually calculated with a venue-defined mark. Realized PnL records the result assigned when exposure is closed or settled, with fees and funding handled according to venue rules.

- Canonical page: https://lynx.finance/glossary/realized-and-unrealized-pnl/
- Published: 2026-07-31
- Updated: 2026-07-31
- Last reviewed: 2026-07-31
- Written by: Lynx Editorial
- Technical review: Lynx Protocol Team
- Category: Pricing and execution
- Also known as: PnL, profit and loss, open PnL, closed PnL
- Related terms: [Position size and notional value](https://lynx.finance/glossary/position-size-and-notional-value/), [Mark price](https://lynx.finance/glossary/mark-price/), [Collateral](https://lynx.finance/glossary/collateral/), [Funding rate](https://lynx.finance/glossary/funding-rate/)
- Related articles: [On-chain perpetual futures, explained](https://lynx.finance/blog/onchain-perpetual-futures-explained/), [Crypto liquidation explained: what happens and who gets the money](https://lynx.finance/blog/crypto-liquidation/)

## In plain English

Unrealized PnL answers, “What gain or loss does the open position currently show under the venue’s accounting price?” Realized PnL answers, “What result has been locked into the account by closing or settling exposure?”

An unrealized gain can disappear before the position closes. A realized gain can still be offset by fees, funding, earlier losses, or a change in collateral value.

## How it works

For a simple linear long position, directional PnL can be expressed as:

`quantity × (current or exit price − entry price)`

For a short, the price difference reverses. Unrealized PnL commonly uses the [mark price](https://lynx.finance/glossary/mark-price/); realized trading PnL uses the actual closing execution or settlement price. Inverse contracts and average-entry calculations require different formulas.

## Why it matters

Unrealized losses reduce the equity supporting a position and can move it toward liquidation. Unrealized gains can increase equity but should not be treated as spendable, final profit until the venue allows them to be realized or used. The net account result should reconcile trading PnL, fees, funding, and collateral changes.

## Worked example

A trader opens a `0.25 ETH` long at `$3,000`. When the mark reaches `$3,120`, simplified unrealized PnL is `0.25 × ($3,120 − $3,000) = $30`.

The trader then closes half the quantity—`0.125 ETH`—at `$3,120`. That realizes `$15` before costs. If the remaining half is still marked at `$3,120`, it shows another `$15` unrealized.

## How it works on Lynx

Lynx distinguishes three PnL views. Gross PnL measures the leveraged price move. Trading PnL includes funding and interest. Net PnL includes all fees and is the value used for the trader’s final result and liquidation accounting.

These values are measured and settled in the selected collateral asset. The collateral token’s own market-price movement is not part of Lynx position PnL.

## Common misconception

> A green unrealized PnL number is not the same as net profit in the wallet. Execution, fees, funding, price impact, and settlement still stand between the estimate and the final result.

## Sources

- [Perpetual-style futures settlement and other mechanics](https://help.coinbase.com/en/derivatives/perpetual-style-futures/settlement-and-other-mechanics) — Coinbase (primary)
- [Futures Glossary](https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/CFTCGlossary/index.htm) — U.S. Commodity Futures Trading Commission (regulatory)
- [Frequently Used Terms in Lynx](https://lynx-finance.gitbook.io/lynx-finance/community/glossary) — Lynx Finance (primary)