How Does the Exchange Calculate a Position’s Unrealized P&L Using the Mark Price?
Unrealized Profit and Loss (P&L) is calculated by taking the difference between the Mark Price and the position's average entry price, multiplied by the position size. This calculation uses the Mark Price instead of the Last Traded Price to prevent temporary market swings from causing a false P&L reading, which could lead to premature or unfair liquidation.
This P&L determines if the margin balance is sufficient.
