What Is Profit & Loss (PnL)?

Profit and Loss (or PnL) is a common term used in trading and is extremely self-explanatory. It simply refers to the total profit or loss made by an individual or group over a certain time period.

P&L Definition and Example

For example, an individual trader may have a daily PnL limit such as +/- $50,000 meaning the maximum amount he will aim to make s $50,000 and if he loses $50,000 he will stop trading for that day.

Often times traders will receive a percentage of their P&L as a commission for making money for the firm.


Popular Posts