What is Realized PNL and Unrealized PNL?
PNL (Profit and Loss) stands for profit and loss, and it can be either realized or unrealized. When you have open positions on a perpetual futures market, your PNL is unrealized, meaning it’s still changing in response to market moves. When you close your positions, the unrealized PNL becomes realized PNL (either partially or entirely).
Because the realized PNL refers to the profit or loss that originates from closed positions, it has no direct relation to the mark price, but only to the executed price of the orders. The unrealized PNL, on the other hand, is constantly changing and is the primary driver for liquidations. Thus, the mark price is used to ensure that the unrealized PNL calculation is accurate and just.
Note:
- Total PNL refers to the total profit and loss of your positions.
- Floating PNL is the unrealized profit and loss of a position calculated based on the index price and the cost price.
What is ROI (Return on Investment)?
Return on Investment, or ROI for short, is a ratio or percentage value that reflects the profitability or efficiency of a certain trade or investment. It is a simple-to-use tool that can generate an absolute ratio or a value in percentage. As such, ROI can also be used when comparing different types of investments or multiple trading operations. Naturally, a high ROI value indicates that the investment was profitable, while a negative ROI means the return was lower than the costs.
What is ROE (Return on Equity)?
Return on Equity or ROE is an indicator which reflects the current NET performance of an open trade. Positive ROE means that the trade is profitable while negative ROE means that the trade is at a loss currently, taking into account the price movement of the asset being traded, as well as all trade fees and funding.