What is floating (unrealized) profit and loss?

You buy EUR/USD and the price ticks up. Your platform shows +$25 next to the trade, yet your account balance has not moved.

That $25 is a floating profit. It changes with every price tick, and it only becomes part of your balance when you close the trade.

What does floating profit and loss mean?

Floating profit and loss is the result your open trades would show if you closed them at the current price. It is also called unrealized, open or running P/L, where P/L is short for profit and loss.

It floats because prices keep moving. A trade that shows +$25 now can show -$30 an hour later, and the number on screen follows each tick.

Realized profit and loss is the result of a trade you have closed. Once a trade is closed its result is fixed, and the broker adds it to or takes it from your account balance.

In MetaTrader, the Trade tab shows the floating result of each open position in its Profit column. When you have no open trades, your floating P/L is zero.

How is floating P/L worked out?

The platform values each trade at the price you could close it at right now. A long trade closes with a sell, so it is valued at the bid. A short trade closes with a buy, so it is valued at the ask.

The bid and ask lesson covers both prices. The sum is the same one you would use for a closed trade:

Floating P/L = price move in pips × pip value

Here is a long trade with round illustrative prices, in a US dollar account with a balance of $1,000:

1. You buy 0.10 lot of EUR/USD at the ask, 1.10000. A standard lot is 100,000 euros, so 0.10 lot is 10,000 euros.
2. One pip on this pair is 0.0001, so the pip value is 10,000 × 0.0001 = $1.00.
3. The bid at that moment is 1.09990. The floating result is 1.09990 minus 1.10000 = -0.00010, which is -1 pip, or -$1.00.
4. Later the bid rises to 1.10250. The move is 1.10250 minus 1.10000 = 0.00250, which is 25 pips, so floating P/L is 25 × $1.00 = +$25.00.
5. Later still the bid falls to 1.09700. The move is 1.09700 minus 1.10000 = -0.00300, which is -30 pips, so floating P/L is -$30.00.

Through all five steps your balance stays at $1,000, and only the floating number changes.

The -$1.00 in step 3 is the spread. You bought at the ask and can only sell at the bid, so every new trade opens with a small floating loss equal to the spread.

What does floating P/L change in your account?

Your balance counts closed trades only. Your equity is the balance plus the floating P/L of everything still open:

Equity = balance + floating P/L

In the example, equity was $999 just after the trade opened, $1,025 when the bid reached 1.10250 and $970 when it fell to 1.09700.

Now you close the trade at a bid of 1.09700. The -$30 becomes realized, your balance drops to $970, and equity and balance match again because nothing is left open.

Equity is the figure that shows how much room your account really has, which is why the equity lesson gets a page of its own. Free margin and margin level are both calculated from equity.

How do several open trades add up?

With more than one trade open, the platform adds the floating results together. A loss on one position can be offset by a gain on another, and the net total feeds into equity.

Go back to the moment before that close, with the EUR/USD long still open at a bid of 1.09700 and showing -$30.00. Say you have also sold 0.10 lot of USD/JPY at the bid of 150.00, and the ask is now 149.60.

1. A JPY pair's pip is 0.01, so the pip value on 10,000 dollars is 10,000 × 0.01 = ¥100.
2. You sold first, so the move is 150.00 minus 149.60 = 0.40, which is 40 pips in your favour.
3. Floating P/L in yen is 40 × ¥100 = ¥4,000.
4. Converted at the current rate, ¥4,000 ÷ 149.60 = $26.74.

The net floating P/L is -$30.00 + $26.74 = -$3.26, so equity is $1,000.00 - $3.26 = $996.74.

The ¥4,000 follows the price in pips. The $26.74 also depends on the USD/JPY rate used to convert it at that moment, so treat the dollar figure as an example.

When does floating P/L become realized?

Floating P/L turns into realized P/L the moment a position closes. You might close it yourself, a stop loss or take profit order might fill, or the broker might close it at a stop out.

You can also realize part of a position. Go back to the moment the EUR/USD bid stood at 1.10250 with +$25.00 floating and only that trade open, and close half of it:

1. The pip value on 0.05 lot is 5,000 × 0.0001 = $0.50.
2. The closed 0.05 lot realizes 25 × $0.50 = +$12.50, and your balance rises to $1,012.50.
3. The 0.05 lot still open shows 25 × $0.50 = +$12.50 floating.
4. Equity is $1,012.50 + $12.50 = $1,025.00, the same as before the partial close.

Closing moves a result from floating into the balance. The profit was already inside your equity, so closing locks it in without adding to it. On an account that charges commission, the fee on the closed part comes off as well.

You can test floating results for other pairs and sizes with the profit and loss calculator.

Why is a floating profit not yet yours?

A floating profit can shrink or vanish before you close. If you size a new trade on equity swollen by an open gain, a reversal can remove that cushion while the new position is still running.

Floating losses have their own trap. Leaving a losing trade open does not cancel the loss. It stays live and keeps pulling equity down while the price moves against you.

If equity falls far enough compared with the margin your trades use, the broker can close positions for you and realize the loss at that price. The next lesson, on margin, margin level and stop out, shows how that point is measured.

Prices can also jump. When the market reopens after a weekend or reacts to a big news release, floating P/L updates at the first available price, which can be far from the last one you saw.

Two costs also touch open trades. Swap, the overnight interest on positions held past the daily rollover, builds up while a trade stays open, and some accounts charge commission when you open. Platforms often list both beside the price result, and equity counts them.