How Is Futures PnL Calculated? Formulas and Worked Examples
How that string of red-and-green numbers next to your position is derived — computed end to end with one position.
Introduction
Mia goes long 0.5 BTC at an average entry price of $50,000. This article uses her single position throughout to show you every step of the PnL calculation.
1. Unrealized vs. Realized: On Paper vs. Locked In
Unrealized PnL is the floating gain or loss on a position you still hold, changing every second with the market; if the market reverses, it shrinks or even flips negative. Realized PnL is the final result locked in after you close the position, entering your wallet balance. The number you see ticking on the position card is the former.
2. The Core Formula
Long unrealized PnL = (mark price − average entry price) × position size; for a short, reverse the subtraction inside the parentheses. Three variables: the average entry price is your position's weighted average cost (a partial close doesn't change it); the mark price is the platform's fair reference price, not the last traded price; position size is measured in the underlying asset (e.g., 0.5 BTC), while PnL is uniformly settled in USDC.
3. Let's Compute It
The mark price rises to 52,000: Mia's floating profit = (52,000 − 50,000) × 0.5 = +$1,000. The market reverses and drops to 49,000: floating loss = (49,000 − 50,000) × 0.5 = −$500. Same position, same cost, only a different mark price. A short follows the same logic in the opposite direction: shorting 1 ETH at 3,000, a drop to 2,800 is +200.
4. PnL Is Not the Same as Return Rate
PnL is a dollar amount; return rate is PnL divided by the margin you put in. Mia's +$1,000 floating profit, if the position was opened at 10x leverage with only $2,500 of margin, is a +40% return — a 4% price move magnified to 40% on the margin. That's exactly the essence of leverage: it magnifies the percentage, not the amount. PnL tells you how much money you made; return rate tells you what your capital endured.
5. Total Account Equity
Total account equity = value of deposited assets + unrealized PnL + realized PnL + funding rate − fees. This is the true value of your account as the system sees it, and the basis for judging how far you are from liquidation. Another practical number: available balance = total equity − margin occupied by positions − margin frozen by open orders — which explains why your “funds available to open positions” shrink during a floating loss.
6. Two Kinds of Money Easy to Overlook
Funding rate: settled between longs and shorts on the hour, every hour; over a long-held position it accumulates into a considerable cost or income. Fees: charged once each on opening and closing (0 for the Standard Account). The formulas above compute gross PnL; net value is what remains after deducting these two.
7. Spot PnL
Spot is much simpler: unrealized PnL = current total asset value − historical total purchase cost; PnL rate = (unrealized PnL ÷ purchase cost) × 100%. With no leverage, a 1% move in the asset price is a 1% PnL rate.
FAQ
Q: Why doesn't my PnL match the candlestick price?
A: Because PnL is calculated with the mark price, not the last traded price. The two diverge in a violent market — this is a deliberate design to prevent an abnormal trade from manipulating your PnL and liquidation.
Q: After a partial close, does the remaining position's average entry price change?
A: No. The average entry price is only re-weighted when adding to a position; a partial close doesn't affect it.
Quick Recap
Long PnL = (mark price − average entry price) × size, short is the reverse. The mark price is not the last price. PnL is in dollars, return rate is a percentage on the margin — leverage magnifies the latter. Total equity = principal plus and minus all floats and fees, and it determines how far you are from liquidation.
Disclaimer
This article is for general informational and educational purposes only and may not apply to the regulations or products available in your region. It does not constitute investment, financial, or trading advice of any kind, nor an offer, solicitation, or recommendation to buy, sell, or hold any digital asset.
Trading digital assets involves high risk, prices can be extremely volatile, and you may lose all of your invested capital. Leveraged trading can result in losses exceeding your initial deposit. Past performance is not indicative of, and does not guarantee, future results.
You should make investment decisions independently based on your own financial situation and risk tolerance, and consult a licensed professional adviser where necessary. While we strive to ensure the accuracy of the information in this article, MC Markets accepts no liability for any errors or omissions, or for any loss you may suffer from using or relying on this information.