Unrealised P&L is the gain or loss on the quantity of a position that remains open, measured by comparing its current valuation with its opening cost basis. Also spelled unrealized P&L, it lets a trader monitor gains and losses before closing a trade. An open loss already reduces marked account equity; leaving the trade open does not remove that economic loss.
For one long share lot, let be the number of shares still held, the purchase price per share and the current mark. Before costs, with no distributions or currency changes,
This is a price gain on the remaining quantity, not the market value of the holding. The mark must have a stated source and timestamp: a last trade, midpoint, bid or model value can give different answers. It is a valuation input, not a promise that the whole holding can be sold there.
A gain without a cash receipt
Consider a synthetic account with USD 1,000 cash. It buys one lot of 10 shares at USD 50 each, leaving USD 500 cash. Assume no fees, financing, distributions, taxes or currency changes. Recognise the purchase cash immediately in this simplified economic ledger; settlement delays and withdrawable broker funds are outside the example.
At a later stipulated mark of USD 55 per share, the shares are worth USD 550 and gross unrealised P&L is USD. The account's cash is still USD 500, but cash plus marked shares now equals USD 1,050. No sale or cash receipt was needed for the increase in marked equity.
If the mark subsequently falls to USD 48 while all shares remain open, the holding is worth USD 480, unrealised P&L becomes −USD 20, and account equity falls to USD 980. The earlier gain was an economic valuation gain that could reverse.
Original synthetic account, before costs. All 10 shares remain open through the three marks. Bars share a USD scale; the changing blue segment is the holding's marked value, not cash received.
As a separate alternative, suppose the account sells all shares at USD 55 before that decline. With no costs and a fill exactly at the existing mark, equity stays USD 1,050. The holding becomes a sale receivable or cash, and the USD 50 gain becomes realised P&L. Closing does not create a second USD 50 gain. A different fill price or an exit fee would change equity at the sale.
The Positions, Trades, Fills and P&L lesson develops this cash-and-holdings reconciliation, including the effect of fills away from the mark. Its preview is public; the full lesson requires membership.
Read the reference price and the reporting convention
An unrealised figure is usually cumulative from the matched opening cost of the remaining lot. Daily P&L uses a different horizon. For example, if these same 10 shares were already held at a previous mark of USD 54 and the current mark is USD 55, the price gain over that interval is USD 10. The cumulative open-lot gain from the USD 50 entry is still USD 50. These are compatible measurements, not competing estimates of the same interval. IBKR's P&L field guide distinguishes open-position P&L from its daily P&L calculation.
With multiple lots or a partial close, identify the opening cost assigned to the shares still held. Cost allocation can change the split between realised and unrealised amounts. Costs matter too: a platform may include entry commissions in its cost basis, whereas the formula above is explicitly gross. IBKR's reporting guide illustrates how matching and commission presentation depend on the report. Read that report's definitions before adding P&L fields or deducting transaction costs again.
The “no cash receipt from marking” statement here describes the share ledger. Do not extend it to every instrument. For exchange-traded futures, daily variation settlement can transfer gains or losses in cash while positions remain open, as CME explains. A position being open does not by itself establish whether its gains have been cash-settled.
Use the whole marked account
A strategy can close winners while accumulating open losses. A closed-trade total then gives an incomplete picture of its equity curve. Monitor open marks alongside realised results, costs and other account cash flows; separate external deposits and withdrawals from investment P&L. Narang treats the realised/unrealised split as a diagnostic of how a strategy makes or loses money, alongside portfolio performance monitoring.
Also distinguish a marked account from an executable liquidation estimate. A midpoint or stale last price may overstate what selling the holding would raise; the bid–ask spread, available depth, price changes and fees affect an actual exit. FINRA's order guide explains why a displayed quote need not match an execution price. An unrealised gain measures an open exposure under a valuation convention; it is neither guaranteed proceeds nor a reason to exclude that exposure from risk monitoring.
Sources
- Interactive Brokers — Profit and Loss: platform definitions of position value, cost basis, unrealised P&L and daily P&L.
- Interactive Brokers — Realized & Unrealized Performance Summary in Base: opening/closing matching and report-specific commission treatment.
- CME Group — Mark-to-Market: daily settlement and cash gains/losses on open futures positions.
- FINRA — Order Types: quoted prices, execution uncertainty and order conditions.
- Rishi K. Narang, Inside the Black Box: A Simple Guide to Quantitative and High-Frequency Trading, 2nd edition (Wiley, 2013), Chapter 10, “How Quants Monitor Risk,” pp. 193–194: marked portfolio monitoring and the realised/unrealised P&L split.