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 realised gain is profit you've actually locked in by selling, as opposed to a paper (unrealised) gain on something you still hold. Until you sell, a gain is just a number on a screen that can still grow, shrink, or disappear entirely; selling is what turns it into money and makes it real.
The distinction matters in two ways. For tax, gains generally become taxable only when realised — so holding rather than selling can defer the bill, and in many places holding longer can lower the rate too (though rules vary by country). Psychologically, remembering that an unrealised gain isn't yet yours guards against the false comfort of a paper profit that a market drop can wipe out before you ever act on it.
A gain is unrealised and still at risk while you hold; selling locks it in as a realised gain — usually taxable, but finally beyond the market's reach. Only realised gains are truly yours.
For example
Your stock is up $5,000 on paper, but only when you sell does that become a realised gain — taxable, and finally beyond the market's reach.
Learn it by doing
That's Realized gain in theory — it clicks when you use it. Practise it hands-on in a free, interactive lesson (Stage 7, Brokers, Accounts & Getting Started).
Try the free lesson →Why it matters to you
The realised/unrealised distinction matters because it drives both tax and behaviour. Since a gain is usually taxed only when realised, the decision to sell is also a decision to trigger tax — which is why patient holding can be tax-efficient. And treating a paper gain as real money can lull you into overconfidence or overspending against wealth that hasn't materialised. Knowing what's locked in versus still at risk keeps both your tax and your mindset grounded.
⚠ Spending or counting on a paper gain
An unrealised gain feels like money in the bank, but it isn't — it can vanish before you sell, and it hasn't been taxed. Mentally spending a paper profit, or making decisions as if it's secured, sets you up for a shock if the market reverses. Only a realised gain is actually yours; treat unrealised ones as provisional.