Unrealized PnL is the estimated gain or loss on an open position at a chosen valuation price. It is often called floating profit or loss because it changes before the exposure is closed.
The reference price matters
For a simple linear long, unrealized PnL equals quantity multiplied by reference price minus average entry price. A short reverses the price difference. Suppose one unit is bought at 100 and the valuation price is 108: unrealized profit is 8, excluding fees and funding.
A platform may display a last-price estimate while using mark price for risk calculations. Those numbers can differ without either being an execution quote. Closing the position depends on available liquidity, so the final realized result can differ from the displayed estimate.
Open does not mean irrelevant
Unrealized losses can reduce account equity and bring a leveraged position closer to liquidation before the trader chooses to close. Treatment of unrealized gains as collateral or available margin depends on the product and account rules.
The displayed estimate may omit trading fees and funding, which can be booked separately. Adding to a position changes its size and possibly its average entry price; that changes the calculation without making earlier price movements disappear.