Understanding Profits and Losses in Stock Trading

2023-05-30
Summary:

Realized gains and losses in stocks refer to the actual gains or losses that investors receive when they sell their stocks at a certain point in time.

Realized gains and losses in stocks refer to the actual gains or losses that investors receive when they sell their stocks at a certain point in time. Simply put, it refers to the profit and loss amount calculated based on the difference between the buying and selling prices after the investor has sold and settled the stocks they hold.

Stock Trading

For example, if an investor purchases 100 A-shares at a purchase price of $10 per share, the total cost is $1000. Later, he sold these stocks at a price of $15 per share, earning $1500. In this case, his realized profit is $500 ($1500 selling price minus $1000 buying price).


Realizing gains and losses is different from unrealized gains and losses for completed transactions. Unrealized gains and losses refer to positions that have not yet been closed, and their value may vary with market fluctuations. Only when closing positions, unrealized gains and losses will become realized gains and losses.

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