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PnL Explained

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Flash PnL versus Official PnL


1) Flash PnL

‘Flash’ PnL.  This is sometimes called ‘Preliminary PnL’ or ‘Prelim PnL’ or ‘Prelim EOD PnL’ (EOD = END or Day).

Many trading organizations do this…. which is to have an earlier version of their EOD PnL.  E.g., 4:30pm local time for a ‘Flash PnL’.  Then the traders will compare their estimates (often done in spreadsheets) to the Flash PnL.  E.g., if the trader estimated up $90k and the Flash PnL is up $95k…. then that might be a typical deviation and so the trader would go home for the day.  Whereas if the trader estimated +$90k and the actual PnL was minus $2m.. then they trader and the ‘middle office’ (the group responsible for running PnL) would look for issues, which would typically be a bad or missing price. 


The issue, whatever it was, would be corrected and typically there would be a second ‘Flash PnL’ run to confirm things look good.


The name ‘flash’ comes from this PnL being something that people can run relatively quickly with something targeting 5 to 10 minutes for a typical mid to large size trading firm.  The official End of Day calcs my take a hour because of extra calculations and extra processing, but that would be ok to be that slow as it would run in a batch after the traders left for the day.    i.e., ‘flash’ meaning ‘speedy’. 


At a typical firm, the official EOD calcs would usually start between 6pm and 7pm.


Then there would be a comparison between the Flash PnL and the actual ‘Official’ PnL, typically the next morning.  The most common reasons for their being a difference are:

a) any late entry trades, i.e., if the trade was done after Flash PnL (after around 4:30pm) and before EOD (around 6pm)

b) any late prices that come in.  For example, a USD/CAD FX (foreign exchange) rate may not come in (from the external source) until 5:30pm.  So an estimate (of the final value) would be used for Flash PnL and if the actual value comes in a little bit different, that would be expected.


The term ‘noise’ is often used to talk about small differences that occur naturally each day between the ‘Flash PnL’ and the ‘Official PnL’.


2) Official PnL

This is commonly called just ‘PnL’ (Profit/Loss) or sometimes EOD PnL (EOD = End of Day).  This is the PnL values and MTM (Mark-to-Market) values that is the values that feed other systems (also known as ‘downstream systems’).  This is sometimes called the ‘PnL of Record’ instead of ‘Official PnL’.


3) Trader Check Out

The term ‘trader check out’ is the term sometimes used for what the traders do prior to being done for the day.




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