Why is the Total Value Lower Than the Unrealized P&L?
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Last updated
Total Value = Deposit Amount + Realized P&L + Unrealized P&L
Deposit Amount: This is the initial amount deposited into your account, for example, 100 USDT.
Realized P&L: This is the profit or loss from positions that have already been closed or settled, meaning these profits or losses have become actual realized gains or losses.
Unrealized P&L: This is the profit or loss from positions that are still open and have not yet been closed. In other words, if you were to close all positions now, this portion of the P&L would be realized.
Example Explanation:
Suppose you initially deposit 100 USDT and open two positions, one with a profit of 1000 USDT and the other with a loss of 1050 USDT.
At this point, the total unrealized P&L is: 1000 USDT - 1050 USDT = -50 USDT, meaning the overall unrealized P&L is -50 USDT.
If you haven't closed the positions, the unrealized P&L shows -50 USDT.
In this case, the total value would be: Total Value = Deposit Amount + Realized P&L + Unrealized P&L = 100 USDT + 0 USDT + (-50 USDT) = 50 USDT.
If you close the losing position, the unrealized P&L would turn to 1000 USDT, and the total value would become 50 USDT.
Why can the total value be lower than the unrealized P&L?
Negative Cash Balance: The user's futures account may have a negative "wallet" balance due to the presence of losing positions. For example, in your case, even though the unrealized P&L shows a profit of 1000 USDT, the user is still losing 1050 USDT, which means the actual balance in the account (Deposit Amount + Realized P&L) could be negative. To prevent forced liquidation, the system may rely on the unrealized profits from open positions to keep the total account value from going negative.
In short, the situation where the total value is lower than the unrealized P&L occurs when:
The user closes the losing position, and the unrealized P&L shows a profit, but due to the remaining losing positions, the actual account balance has gone negative, and the account balance can only be supported by the unrealized profits of open positions.
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