Net P&L (Profit and Loss)

Net P&L is your bottom line — the total amount you made or lost trading prediction markets after accounting for all costs. It's calculated as:

Example

You closed 20 positions during the year:

• Total proceeds from all closings: $12,500
• Total cost basis (what you paid): $9,800
• Total fees: $150
• Net P&L: $12,500 − $9,800 − $150 = $2,550 profit

Net P&L vs. gross winnings

Net P&L includes both wins and losses netted together. Gross winnings only count winning positions. These numbers matter because different tax methods use different baselines:

• Ordinary income: Taxed on net P&L
• Capital gains: Each position reported individually, but net effect determines tax
• Section 1256: Net P&L gets the 60/40 split
• Gambling: Gross winnings reported, losses deducted separately

Open vs. closed positions

Net P&L only includes closed positions (positions with a disposition). Open positions where the market hasn't resolved yet are not included, unless you're using Section 1256 mark-to-market treatment.