In decentralized finance (DeFi) futures trading, traders often encounter two key concepts: Realized Profit and Loss (PnL) and Unrealized Profit and Loss. These terms are used to assess the financial performance of a trader's positions.
Realized PnL represents the actual profit or loss that a trader has incurred on a trade. It is the profit or loss that has been "realized" by executing a trade in the market.
Unrealized PnL represents the paper profit or loss on open positions that have not been closed. It reflects the current market value of an open position but has not yet been realized through an actual trade.
On the user interface, the distinction between Realized Profit and Loss (PnL) and Unrealized PnL is reflected as follows:
Position History Tab:
In the Position History tab, you will find the PnL tab, which exclusively displays Realized PnL. This section accounts for the profit or loss from fully closed trades. It provides a clear overview of the actual gains or losses realized through completed transactions.
Position Open Tab:
In contrast, the Position Open tab combines both Realized and Unrealized PnL. Here, Realized PnL encompasses profits from partially closed trades and funding. Meanwhile, Unrealized PnL factors in the current trade's funding and the present trading profit and loss.