Many people are still confused about PNL in crypto trading. Actually, the concept is simple—it's just a way to measure how much profit or loss you make from each transaction.

So what is PNL? In short, PNL is Profit and Loss—gains and losses. In a crypto exchange, it shows the difference between your buying price and your selling price of an asset. If the difference is positive, it means profit. If negative, it means loss. Easy, right?

The formula is very basic: PNL = (Selling Price – Buying Price) × Quantity of assets – Fees. For example, you buy 0.1 BTC at $40,000 (total $4,000). Then you sell at $42,000 (receiving $4,200). Your profit is $200, but after deducting exchange fees, your PNL is around +$198.

Now, what you need to understand is that there are two different types of PNL. Unrealized PNL is the profit or loss that hasn't been realized yet—your position is still open, not closed. Meanwhile, Realized PNL is the final one—your transaction has been closed and the money has entered or left your account.

There’s also the term ROI (Return on Investment) which is often associated with PNL—this measures the percentage return on your investment. Then there’s Margin and Leverage, which can drastically change your PNL size.

To make it easier, imagine you sell coffee. Buy at 50, sell at 70—your profit of 20 is your positive PNL. But if you sell at 40, losing 10, that’s a negative PNL. In crypto exchanges, the system is the same, just with larger numbers and faster movements. Sometimes, PNL can be volatile—profits or losses change drastically because prices fluctuate.

Basically, what is PNL? It’s the financial thermometer of your trading. By understanding this concept, you can be more aware of your own trading performance. If you want to track your PNL in more detail, Gate has tools that are quite helpful for monitoring positions and trading performance.