Floating profit and loss
Family III · Risk
Not to be confused with realized profit and loss, unrealized profit and loss, average win loss ratio.
Floating profit and loss is the running gain or loss attached to positions that are still open. It is marked to the current bid or ask, so it moves with every price change and is not yet a realised result. Because it is not booked, it can disappear before the position is closed.
How it is calculated
For a long position, floating profit and loss equals the current bid minus the entry price, multiplied by the position size, with any conversion into the account currency applied. For a short position, the current ask is subtracted from the entry price instead. The result is shown in the account currency and is updated tick by tick.
Brokers may display floating profit and loss gross or net of commission and financing charges; whether those costs are included varies by broker and account type.
Worked example
Relationship to margin
Floating profit increases free margin and floating loss reduces it, which affects how much room remains before a margin call or stop-out. The thresholds at which those actions occur are set by the broker and vary by regulator and account type.
Often confused with
- realized profit and loss
- Realized profit and loss is the result of a closed position and is fixed, whereas floating profit and loss belongs to an open position and keeps changing; the visible sign is that realized figures appear in the trade history or closed-positions list.
- unrealized profit and loss
- Unrealized profit and loss is the same open-position result under a different name, so the two are synonyms rather than opposites; the visible sign is that both are shown only while the position remains open.
- average win loss ratio
- The average win loss ratio is a performance statistic that divides the mean profit of winning trades by the mean loss of losing trades over a chosen period, expressing how much the typical winner earns relative to the typical loser.