What is realized P&L?
In one line: Realized P&L is the profit or loss from trades you've closed. Once a trade is closed, the result is locked in and shows up in your cash balance.
A simple example
You buy 40 shares at $25.00 and sell them at $26.50. Commission is $1 each way.
- Gross gain: ($26.50 − $25.00) × 40 = $60
- Costs: $2
- Realized P&L: +$58
The trade is closed, so the $58 is locked in. It doesn't change if the stock moves tomorrow.
Realized vs unrealized
| Realized P&L | Unrealized P&L | |
|---|---|---|
| Trade status | Closed | Still open |
| Changes with price? | No | Yes, every tick |
| Shows in | Cash balance | Account equity |
The open side is covered in unrealized P&L.
Partial closes
If you sell part of a position, only that part is realized. Bought 40, sold 20 at a $1.50 gain? About $30 is realized, minus costs. The other 20 shares are still open. See scaling out.
Why it matters
Realized P&L is what your journal should track trade by trade. It's the honest record of your process, after Commissions, Spreads and fees.
It's also the number most tax rules look at. In the US, gains and losses usually count for tax when they're realized. Talk to a tax professional about your own situation.
A common mistake
Counting only the wins you've realized. Closing winners fast while leaving losers open makes realized P&L look great while the account quietly shrinks. Always look at realized and unrealized together, which is your total equity.
Log every closed trade in units of risk (R) too, not just dollars. A +$58 trade where you risked $40 is +1.45R. That's easier to compare across trades. See R-multiple.
Your free journal template has columns for both. Learn the routine in how to keep a trading journal.
Questions
What does P&L stand for?
Profit and loss. It's the running result of your trades.
When does unrealized P&L become realized?
When you close the trade, fully or partly. The closed part becomes realized.
Does realized P&L include fees?
It should. Most brokers show it after commissions, but check whether swaps, funding or other fees are included.
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