Wallet tracking & rankings
What is the difference between realised and unrealised PnL?
Realised PnL is profit or loss from positions you have already closed: the trade is finished and the result is in your balance. Unrealised PnL is the paper value of positions you still hold, and it moves every second without you doing anything. The distinction matters most when you are judging somebody else, because a ranking built on unrealised profit promotes whoever happens to be holding something that has run.
The definitions, precisely
- Realised. You bought at one price and sold at another. The difference is settled, it is in your wallet, and no subsequent price move changes it.
- Unrealised. You bought and still hold. The difference between your entry and the current mark is a valuation, and it is only worth what you can actually exit at.
Why the difference is not academic
Unrealised profit on a thin memecoin is a particularly soft number. The mark assumes you can sell at the last traded price, and on a token with little liquidity you cannot: your own exit moves the price against you, sometimes severely. Two positions showing the same paper gain can be worth very different amounts the moment either one is actually closed.
What it does to a leaderboard
A ranking that counts unrealised gains promotes whoever is currently holding the token that has moved most, which is a fact about the token rather than about the trader. It also lets a position sit at the top for as long as it is not sold, and quietly leave when it finally is. Ranking on realised profit is less exciting and much harder to game, which is why it is the choice here.
Reading your own portfolio
Applied to yourself, the same distinction is what stops a good week from feeling like a good system. Judge your process on closed trades, because those are the ones where you made every decision including the hard one. An account that looks profitable entirely on open positions has not yet proved that it can exit, and exiting is the half most people are bad at.
Common questions
- Is unrealised profit real?
- It is real as a valuation and provisional as money. On a liquid asset the two are close. On a thin memecoin they can be very far apart, because the mark assumes an exit at the last traded price and your own sell is usually large enough to move it.
- When does unrealised profit become realised?
- When you close the position and the sale settles. Until then it is a number that can go to zero without you doing anything, which is exactly what happens to a large share of the paper gains anybody has ever screenshotted.
- Do I owe tax on unrealised gains?
- That depends entirely on where you live, and it is not a question this page can answer for you. Most jurisdictions treat a disposal as the taxable event, but the details vary enough that it is worth asking somebody qualified rather than a trading terminal.
- Which number should I judge a trader on?
- Realised, every time. It is the only one that reflects decisions the trader actually completed, and the only one that cannot be quietly improved by a price move after the fact. Unrealised profit tells you what they are holding, not how well they trade.
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