Floating Loss

What is Floating Loss in CFDs Trading?

Floating loss is the temporary, unrealized loss on an open trade. It appears when the market price moves against your position and shows a negative value in your account. This loss is not final until you close the trade. If the market price moves, the floating loss can change.

In simple terms, the floating loss meaning is just “what you would lose if you closed your trade right now.” This makes it an important number for beginners to monitor when learning what is floating loss in trading.

Floating Loss vs. Realized Loss

It’s important not to confuse floating loss with realized loss.

• Floating loss is an unrealized loss; it appears when the market moves against your open position, but since the trade is still active, the amount can change as prices fluctuate.
• Realized loss happens when you close the trade at a lower price than your entry. The loss becomes actual (or “realized”) and is permanently reflected in your account balance.

Example: If your EURUSD position shows a –$50 floating loss and you decide to close it, that –$50 becomes your realized loss.

Example of Floating Loss

Imagine you buy EURUSD expecting the price to rise. If the price drops instead, your account might show –$50. That –$50 is your floating loss. If the price goes back up, that floating loss may reduce or even turn into a gain.