« Unrealised P/L vs Realised P/L - What Is The Difference?

November 15, 2020 • ☕️ 3 min read


U/PL, R/PL, realized P/L, unrealised P/L - Bitcoin derivatives trading can be confusing sometimes.

This article will help you understand the differences.


P/L is simply an abbreviation for profit or loss.

On Mushino, P/L is calculated using the following formulas:

((1/Entry Price) - (1/Exit Price)) * Position Size

when you’re long, and

((1/Exit Price) - (1/Entry Price)) * Position Size

when you’re short.

  • The Entry Price is the price at which you entered your position.

  • The Exit Price is the price at which you exited your position.


What if you haven’t exited your position yet?

How do you know your Exit Price?

The answer is: You don’t. There is no way to tell at which price you will exit your position.

However, we still want a way to calulate your P/L.

To get around this, we introduce a hypothetical Exit Price.

We assume that this hypothetical Exit Price is the same as the current Mark Price.

In other words, we assume that you will close your position at the current Mark Price.

There is no guarantee that this will be the case - in fact, you may end up exiting your position far away from the Mark Price.

Using the Mark Price to calculate your U/PL

Now, however, we can calculate your hypothetical P/L. We also call this your unrealised P/L (U/PL).

Substituting the Exit Price for the Mark Price, we get the formulas for your U/PL:

((1/Entry Price) - (1/Mark Price)) * Position Size

when you’re long, and

((1/Mark Price) - (1/Entry Price)) * Position Size

when you’re short.

Why choose the Mark Price?

The Mark Price is an artificial price created by Mushino.

It is based on an aggregate of prices across 10 different spot exchanges (with outliers being excluded from the calculation).

This makes it extremely manipulation-resistant.

Due to the way outliers are excluded, one would need to manipulate the markets on more than 5 different spot exchanges, simultaneously, to affect the Mark Price on Mushino.

To accommodate for the difference between Futures and Spot Prices, a small buffer is added or subtracted from the price aggregate.

We call this buffer the Futures Premium.

The Futures Premium is central for the calculation of the Funding Rate. Read more about Funding here.

We could choose the current Market Price, or the Last Traded Price, instead, but these would be much more susceptible to price manipulation. Because of that, we stick to the Mark Price for the U/PL calculation.

U/PL is not final

Note that U/PL is purely hypothetical. It changes all the time, as the Mark Price goes up or down.

Because of that, U/PL cannot be withdrawn. It is an informational statistic - nothing more.


Once you close your position, we can calculate your true P/L.

The true P/L is also known as realised P/L, or R/PL.

To calculate it, we simply use the P/L formulas from before:

((1/Entry Price) - (1/Exit Price)) * Position Size

when you’re long, and

((1/Exit Price) - (1/Entry Price)) * Position Size

where the Exit Price is the price at which you closed your position.

If you closed your position at several different prices (using more than 1 order), your Exit Price will be a weighted average of those prices.

R/PL is final and can be withdrawn.

You do not need to close your entire position to receive R/PL.

Once you have closed your position partially (it may be with as little as $1), you will accumulate R/PL.

The R/PL is added directly to the collateral of your position.

That is why you will see your leverage change, once you accumulate R/PL.

  • If you accumulate a positive R/PL, your new leverage will be lower than before.

  • If you accumulate a negative R/PL, your leverage will be higher than before.

To withdraw R/PL to your Cash Balance (so that you can ultimately withdraw it to your own wallet), you must either increase the leverage of your position, or close it entirely. Increasing the leverage is easy - you simply drag the leverage slider to the right.

Once you have withdrawn R/PL to your Cash Balance, you may then withdraw it to your own wallet.


  • Unrealised P/L is a hypothetical form of profit or loss that cannot be withdrawn. it is presented to you for informational purposes only.

  • Realised P/L is the real profit or loss that you have accumulated from your position. It can be withdrawn to your own wallet.