Kraken futures PnL explained

Understanding Kraken Futures and Their Role in Cryptocurrency Trading

Kraken futures are derivative contracts offered by the Kraken exchange that allow traders to speculate on the future price of cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and other supported digital assets. These futures enable users to take either a long or short position without owning the underlying asset. The core mechanism revolves around agreeing on a price today for settlement at a later date. This financial instrument is widely used for hedging risk, leveraging positions, and capitalizing on market volatility.

When engaging in Kraken futures trading, every position carries an associated profit and loss (PnL) metric. PnL reflects the net gain or loss from open or closed positions based on changes in the contract's market value. It is calculated differently depending on whether the position is still open (unrealized PnL) or has been closed (realized PnL). Understanding how these values are derived is crucial for managing risk and optimizing strategy.

Unrealized vs Realized Profit and Loss (PnL)

The distinction between unrealized PnL and realized PnL is fundamental when evaluating performance on Kraken futures.

• Unrealized PnL represents the current profit or loss of an open position. It fluctuates with market prices and is not locked in until the position is closed.
• Realized PnL is the actual profit or loss recorded after closing a trade. This value becomes permanent and contributes directly to your account balance.

For example, if you enter a long position on a BTC/USD futures contract at $30,000 and the current mark price rises to $32,000, your unrealized PnL will reflect the gain based on your position size and leverage. Once you exit the trade at $32,000, that gain becomes realized. Conversely, closing below $30,000 results in a realized loss.

Kraken uses the mark price, not the last traded price, to calculate unrealized PnL. This prevents manipulation and ensures fairness by referencing a fair value derived from spot indices and funding rates.

How Unrealized PnL Is Calculated on Kraken Futures

The formula for unrealized PnL varies slightly depending on whether the contract is inverse or linear. Kraken supports both types, and understanding their differences is essential.

For inverse futures (denominated in cryptocurrency):

• Unrealized PnL (in base currency) = Position Size × [(1 / Entry Price) − (1 / Mark Price)]

This result is in the base asset (e.g., BTC). To convert it to USD, multiply by the current BTC/USD price.

For linear futures (denominated in USD):

• Unrealized PnL (in USD) = Position Size × (Mark Price − Entry Price)

In this case, the PnL is already in fiat terms. For instance, holding a 1-contract long position in ETH/USD linear futures at $2,000 with a mark price of $2,100 yields an unrealized PnL of $100 per contract.

It’s important to note that funding payments also affect unrealized PnL over time. These periodic transfers between longs and shorts occur every 8 hours and are based on the difference between the futures price and the spot index. Positive funding rates mean longs pay shorts, reducing long positions’ unrealized gains.

Calculating Realized PnL After Closing a Position

Once a futures position is closed, realized PnL is computed based on the entry and exit prices, adjusted for fees and funding.

For inverse contracts:

• Realized PnL (in base coin) = Position Size × [(1 / Entry Price) − (1 / Exit Price)]
• Subtract taker/maker fees in the base currency
• Account for net funding payments received or paid during the trade

For linear contracts:

• Realized PnL (in USD) = Position Size × (Exit Price − Entry Price)
• Deduct trading fees in USD
• Include any funding costs or receipts

Suppose you open a 10,000 USD long position in BTC/USD inverse futures at $30,000 and close at $33,000. Your gross PnL is:

• 10,000 × [(1/30,000) − (1/33,000)] = 0.0303 BTC
• Convert to USD: 0.0303 × 33,000 ≈ $1,000

After deducting a 0.05% taker fee ($5) and any funding outflows, the final realized PnL adjusts accordingly.

Kraken displays all these components in the trade history and PnL ledger, accessible under the futures dashboard.

Viewing and Interpreting PnL Data on the Kraken Interface

Accessing PnL information on Kraken requires navigating specific sections of the futures trading interface.

• Log in to your Kraken account and switch to the futures trading view
• Locate the Positions tab to see active trades with real-time unrealized PnL
• Check the PnL & Fees tab for a detailed breakdown of realized gains and losses
• Use the Funding History section to review periodic payments affecting PnL
• Export data via API or CSV reports for external analysis

Each row in the PnL ledger includes:

• Trade ID
• Instrument (e.g., BTC/USD)
• Side (buy/sell)
• Entry and exit prices
• Position size
• Realized PnL amount
• Fee deductions
• Net funding impact

Traders can filter by date range, symbol, or PnL type. The platform supports both cross-margin and isolated-margin modes, which influence liquidation thresholds but not PnL calculation logic.

Common Factors That Influence Futures PnL Accuracy

Several variables can impact the precision and perception of PnL on Kraken futures.

• Mark price divergence: Sudden spikes or gaps in spot markets may cause temporary misalignment between mark and last prices.
• Funding rate volatility: High positive or negative funding can erode profits, especially in prolonged positions.
• Fee structure: Taker fees (0.02–0.05%) and maker rebates (−0.01% to 0.02%) alter net outcomes.
• Leverage usage: While leverage amplifies returns, it also magnifies losses and increases margin requirements.
• Liquidation events: If a position is liquidated, realized PnL reflects the forced exit price, often unfavorable.

Monitoring the liquidation price and margin utilization helps avoid premature closures. Kraken provides alerts and margin call notifications to assist in risk management.

Frequently Asked Questions

Q: Does Kraken include funding payments in the displayed unrealized PnL?Yes, funding payments are factored into unrealized PnL over time. The system automatically adjusts the position value every 8 hours when funding is exchanged. Long positions lose value when paying funding; shorts gain in such cases.

Q: Can I export my complete futures PnL history from Kraken?Absolutely. Navigate to Reports > Futures PnL and select the desired date range. Click Export CSV to download a file containing all realized trades, fees, funding, and net PnL. API users can retrieve this data using the GetLedgers endpoint with asset=future.

Q: Why does my unrealized PnL change even when the market price doesn’t move?This can occur due to funding rate accrual. Even in stagnant markets, funding is calculated and applied periodically. Additionally, the mark price may adjust based on the underlying spot index, causing minor fluctuations.

Q: How does Kraken handle PnL for partial position closures?When closing part of a position, Kraken uses the first-in, first-out (FIFO) method. The earliest opened portion of the position is closed first. Unrealized PnL updates for the remaining quantity, and realized PnL is calculated based on the exit price of the partial amount.