What is unrealized P&L?
In one line: Unrealized P&L is the gain or loss on positions you still hold. It changes with every price move and only becomes final when you close the trade.
A simple example
You buy 0.1 lot of EUR/USD at 1.0850. That's about $1 a Pip.
- Price moves to 1.0880: +30 pips, about +$30 unrealized.
- An hour later it's 1.0835: −15 pips, about −$15 unrealized.
Nothing is locked in yet. Close at 1.0835 and the −$15 becomes realized P&L.
How it shows on your account
| Line on your platform | What it means |
|---|---|
| Balance | Cash, including realized P&L |
| Unrealized P&L | Live result of open trades |
| Equity | Balance + unrealized P&L |
Say your balance is $3,000 and your open trades are −$120. Equity is $2,880. That's what your account is really worth right now.
Why it matters
Unrealized losses reduce your equity, and your equity is what backs your Margin. If open losses grow far enough, you can face a Margin call or liquidation without closing a single trade yourself.
On crypto exchanges, unrealized P&L is often worked out from the mark price, not the last trade on the chart.
A common mistake
Watching unrealized P&L tick by tick. Seeing +$40 turn into +$10 makes it tempting to close early. Seeing −$30 makes it tempting to move the stop. Both break the plan, and both are driven by the number, not the chart.
Many traders hide the P&L column while a trade is open and watch only price against their stop and target. Try it on your next practice trade.
A loss you're still holding is also called a paper loss. The deepest open dip in your account over time is Drawdown.
Questions
What does unrealized P&L mean?
The profit or loss on a trade that's still open. It can change until you close the trade.
Does unrealized loss affect my account?
Yes. It lowers your equity and can reduce the margin you have free for other trades.
Is unrealized gain taxed?
Generally not in the US for stocks until you sell, though some products follow different rules. Talk to a tax professional about your situation.
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