Investing term
What is Realized gain?
The profit (or loss) on positions you've actually sold, as opposed to paper gains on positions you still hold.
A realized gain is profit you've actually locked in by selling, as opposed to a paper (unrealized) gain on something you still hold. The distinction matters for taxes — gains usually become taxable only when realized — and for psychology, since unrealized gains can still vanish. Until you sell, a gain is just a number that can move.
For example
Your stock is up $5,000 on paper, but only when you sell does that become a realized gain — taxable, and finally beyond the market's reach.
Realized gain is taught hands-on in Stage 7 — Brokers, Accounts & Getting Started.
See the lesson →