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Introduction
Perpetual futures are among the most widely used derivatives in the cryptocurrency market, providing traders with leverage, flexibility, and continuous trading opportunities. However, one of the most critical aspects of trading perpetual contracts is effectively managing unrealized PnL (Profit and Loss). Poor management of unrealized PnL can lead to forced liquidations, missed opportunities, and heightened trading risks.
This article provides a comprehensive checklist for managing unrealized PnL in perpetual futures, blending theory, practical strategies, and personal trading insights. We will explore at least two advanced methods, compare their strengths and weaknesses, and recommend actionable best practices. Along the way, we’ll reference internal resources such as How to calculate unrealized PnL in perpetual futures and Why monitor unrealized PnL in perpetual futures trading to give readers deeper guidance.
What Is Unrealized PnL in Perpetual Futures?
Definition
Unrealized PnL refers to the profit or loss of an open position in perpetual futures, calculated based on the difference between the entry price and the current mark price. Unlike realized PnL, it only becomes locked in when the position is closed.
Formula
For a long position:
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Unrealized PnL = (Mark Price – Entry Price) × Position Size
For a short position:
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Unrealized PnL = (Entry Price – Mark Price) × Position Size
Understanding how to calculate these figures is essential—see How to calculate unrealized PnL in perpetual