Why is the Total Value Lower Than the Unrealized P&L?

Understanding Total Value, Realized & Unrealized P&L

Total Value = Deposit Amount + Realized P&L + Unrealized P&L

• Deposit Amount: This is the initial amount you deposited into your account. For example, 100 USDT.

• Realized P&L: This refers to the profit or loss from positions that have already been closed or settled. These are actual gains or losses that are no longer subject to market fluctuations.

• Unrealized P&L: This refers to the profit or loss from positions that are still open. If you were to close all positions immediately, this amount would become your realized P&L.

---

Example Explanation:

Let’s break it down with an example:

• You deposit 100 USDT into your account.

• You open two positions:

  • One with a profit of 1000 USDT.

  • One with a loss of 1050 USDT.

At this point, the total unrealized P&L is:

• 1000 USDT (profit) - 1050 USDT (loss) = -50 USDT.

Since you haven’t closed the positions yet, the unrealized P&L shows -50 USDT.

Now, the total value is calculated as:

• Total Value = Deposit Amount + Realized P&L + Unrealized P&L

• Total Value = 100 USDT (deposit) + 0 USDT (realized P&L) + (-50 USDT) (unrealized P&L)

• Total Value = 50 USDT.

If you close the losing position, the unrealized P&L will turn to 1000 USDT, and your total value will adjust accordingly.

---

Why Can the Total Value Be Lower than the Unrealized P&L?

Negative Cash Balance:

In some cases, a negative cash balance in the account can cause the total value to be lower than the unrealized P&L. Here’s how:

• Suppose the unrealized P&L shows a profit of 1000 USDT, but you also have a losing position of 1050 USDT. This means the overall account balance (Deposit Amount + Realized P&L) could be negative.

• To avoid forced liquidation, EasiCoin uses unrealized profits from open positions to maintain the total account balance.

---

Summary:

The total value can be lower than the unrealized P&L when:

• You close the losing position, but the unrealized P&L shows a profit. However, because of the remaining losing positions, the account balance may have gone negative. The account balance is therefore only supported by the unrealized profits from the open positions.

EasiCoin Team