Realized vs Unrealized P&L Explained — And How to Track Both (2026)
Your portfolio shows a big green number. Is that real? It depends entirely on whether that gain is realized or unrealized — and that distinction matters for your tax bill, your risk exposure, and how accurately you judge your investing performance.
What is unrealized P&L?
Unrealized P&L (also called open P&L or paper gains/losses) is the profit or loss on positions you currently hold. It's called "unrealized" because you haven't actually received the money yet — the gain or loss only exists on paper as long as you continue to hold the position.
Formula: Unrealized P&L = (Current Price − Average Entry Price) × Shares Held
Example: You bought 100 shares of NVDA at $495. Today it trades at $620. Your unrealized gain is ($620 − $495) × 100 = $12,500. If NVDA drops to $400 tomorrow, that $12,500 disappears instantly — you never received it.
Unrealized P&L is the number a live portfolio tracker shows you in real time. It fluctuates every second the market is open.
What is realized P&L?
Realized P&L is the gain or loss that is locked in permanently when you sell a position. Once you sell, the money hits your account and can't be taken back by price movements.
Formula: Realized P&L = (Sell Price − Average Entry Price) × Shares Sold
Example: Continuing the NVDA example above — you sell 50 shares at $620. Your realized gain is ($620 − $495) × 50 = $6,250. You still hold 50 shares with an unrealized gain of $6,250. But the $6,250 from the sale is yours permanently regardless of what NVDA does next.
Why both numbers matter
Unrealized P&L tells you about risk and opportunity. A large unrealized gain is also a large potential loss if the market reverses. Monitoring your unrealized P&L in real time helps you decide when to take profits (by selling to realize the gain) and when your stop loss has been hit (at which point unrealized losses become permanent if you don't act).
Realized P&L tells you what you've actually made. This is the number that matters for tax purposes in most jurisdictions — you pay capital gains tax on realized gains, not unrealized ones. It's also a more honest measure of your investing performance than paper gains alone.
Many investors look impressive on paper (large unrealized gains) but have poor realized P&L because they never sell winners before they give back gains, or they cut losers too late.
How PortfolioTrackr tracks both
Unrealized P&L is shown on every position card in your dashboard — current value vs cost basis, with colour coding and percentage. Your portfolio header shows the total unrealized P&L across all open positions. The P&L chart history tracks the change in your unrealized portfolio value over time.
Realized P&L is tracked in the sell log. Every time you log a sell trade, PortfolioTrackr calculates the exact realized gain or loss for that transaction using your average entry price at the time of the sale. The trade history shows each realized trade with its P&L value, and you can see cumulative realized P&L in the trade summary.
If you sell part of a position and keep the rest, PortfolioTrackr handles the split correctly — it realizes the P&L on the sold portion and continues tracking unrealized P&L on the remaining shares at the same entry price.
Common mistakes investors make
Counting unrealized gains as performance: A portfolio that's 40% up on paper is great, but if your realized P&L for the year is flat (you haven't actually taken any profits), your financial position hasn't changed. Paper gains can and do reverse.
Ignoring unrealized losses until they become realized: Refusing to sell a losing position doesn't make the loss go away — it keeps you in it as the loss potentially grows. Tracking unrealized P&L in real time against a stop loss prevents this trap.
Not tracking realized P&L per-portfolio: If you mix all your accounts into one tracker, you can't see which strategy is actually making money. A per-portfolio realized P&L view shows you clearly which approach works.
Track Realized and Unrealized P&L in Real Time
PortfolioTrackr shows live unrealized P&L on every position and tracks realized P&L per trade in your sell log. Try free for 3 days.
Start Free Trial → What is P&L? Full guide →Frequently asked questions
What is the difference between realized and unrealized P&L?
Unrealized P&L is the gain or loss on positions you still hold — it changes with market prices. Realized P&L is the gain or loss locked in when you sell — it doesn't change.
Do I pay tax on unrealized gains?
In most jurisdictions, no. Capital gains tax is triggered when you sell (realize the gain). Unrealized gains are generally not taxable. Always consult a qualified tax advisor for your specific situation.
How do I track realized P&L?
Log your sell trades in PortfolioTrackr. Each sale automatically calculates realized P&L based on your average entry price. Your trade history shows every realized gain and loss in one place.