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Why Can Account Total Value Be Lower Than Unrealized Profit/Loss?

In futures trading, some users may notice that the displayed "Total Value" of their account is lower than the "Unrealized Profit/Loss," which can be confusing. This is a normal occurrence, typically related to the actual equity structure of the account.

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I. How Account Total Value is Calculated

In a NewCoin futures account: Total Value = Deposited Amount + Total Realized P&L + Total Unrealized P&L

The components are defined as follows:

  • Deposited Amount: The initial funds the user has actually transferred into the futures account.

  • Total Realized P&L: The profit or loss from positions that have been closed or settled, which has already been accounted for in the account balance.

  • Total Unrealized P&L: The floating profit or loss from currently held, unclosed positions. This is only a paper profit/loss.

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II. Example Illustration

Assumptions:

  • Initial deposit: 100 USDT

  • Currently holding two positions:

    • Position A: Unrealized Profit = +1,000 USDT

    • Position B: Unrealized Loss = −1,050 USDT

1️⃣ With Open Positions

  • Total Unrealized P&L: +1,000 − 1,050 = −50 USDT

  • Total Value Calculation: Total Value = 100 + 0 − 50 = 50 USDT

2️⃣ After Closing the Losing Position When the user closes the position with a −1,050 USDT loss:

  • Realized P&L: −1,050 USDT

  • Unrealized P&L: +1,000 USDT (from the remaining profitable position)

The account status becomes:

  • Actual Account Balance (Deposited Amount + Realized P&L) = 100 − 1,050 = −950 USDT

  • Total Value Calculation: Total Value = (−950) + 1,000 = 50 USDT

Although the unrealized P&L shows +1,000 USDT, the account's Total Value remains only 50 USDT.

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III. Why Can Total Value Be Lower Than Unrealized P&L?

Core Reason: The account has a "negative actual balance."

In futures trading:

  • Unrealized P&L ≠ Available Funds

  • A losing position may have already consumed the account's actual principal.

  • Upon closing, the loss is converted into a realized loss, directly reducing the account balance.

Therefore, even if a profitable position still exists:

  • The account's actual balance may already be negative.

  • The system relies on the unrealized profit from the unclosed position to keep the Total Value positive.

This leads to the situation where: Total Value < Unrealized P&L.

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IV. Key Points to Understand

  • Unrealized P&L is only a paper (floating) result.

  • Total Value is the true indicator of the account's overall current equity.

  • A profitable position might merely be "compensating" for losses already incurred.

  • In extreme cases, if the profitable position reverses, the account may still face liquidation risk.

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V. Risk Reminder

Please keep the following in mind:

  • Do not assess account risk based solely on the unrealized profit of a single position.

  • Always use [Account Total Value / Margin Ratio] as your primary risk reference.

  • Manage position sizes reasonably to avoid rapid declines in account equity due to volatility in a single direction.

The NewCoin Team reminds you: Futures trading involves significant risk. Please participate rationally, ensuring you fully understand your account structure and risk mechanisms.

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