This content originally appeared on DEV Community and was authored by 22s Pocket Portfolio
💰 Realised vs Unrealised P/L — Money in Your Pocket vs Money on Paper
Most investors check their portfolio and see numbers changing every day — but not all those gains (or losses) are real.
Let’s clear that up.
🧠 The Simple Truth
- Realised Profit/Loss → You sold the investment. The gain or loss is locked in.
- Unrealised Profit/Loss → You still hold the investment. The value changed, but it’s only on paper.
Think of it like a house:
The market value of your house may rise — that’s unrealised profit.
You only realise it when you sell.
📊 Real-World Example
You bought AAPL at £150.
Today it’s £170.
| Status | Meaning | Value Change |
|---|---|---|
| Unrealised P/L | Price moved, but you haven’t sold. | +£20 (13.3%) |
| Realised P/L | You sold at £170 — gain is final. | +£20 (13.3%) |
If AAPL drops back to £150 before you sell, the unrealised gain disappears — you never actually made (or lost) money.
🧮 Try It Yourself — P/L Calculator
Paste this code snippet into your local repo (/components/PLCalculator.tsx)
import React, { useState } from "react";
export default function PLCalculator() {
const [buy, setBuy] = useState(150);
const [sell, setSell] = useState(170);
const [shares, setShares] = useState(10);
const pl = (sell - buy) * shares;
const percent = ((sell - buy) / buy) * 100;
return (
<div className="max-w-sm p-4 border rounded-xl bg-white dark:bg-gray-900">
<h3 className="font-semibold mb-2">P/L Calculator</h3>
<label>Buy Price (£)</label>
<input value={buy} onChange={e=>setBuy(+e.target.value)} type="number" />
<label>Sell Price / Current Price (£)</label>
<input value={sell} onChange={e=>setSell(+e.target.value)} type="number" />
<label>Shares Held</label>
<input value={shares} onChange={e=>setShares(+e.target.value)} type="number" />
<p className="mt-3">
<strong>{pl >= 0 ? "Gain" : "Loss"}:</strong> £{pl.toFixed(2)}
(<strong>{percent.toFixed(2)}%</strong>)
</p>
</div>
);
}
`
💡 Tip: Change the “Sell Price” to test different outcomes —
what’s your profit if AAPL falls to £145?
📚 Why This Matters for You
- You only pay taxes on realised gains.
- Unrealised losses may recover — don’t panic-sell.
- Knowing the difference helps you plan exits, re-entry, and rebalancing.
📺 See It in Action
Inside Pocket Portfolio → Trades → P/L View,
you’ll find unrealised values.
⚠️ Common Mistakes to Avoid
- Celebrating too early — gains aren’t real until sold.
- Ignoring taxes — realised profits can trigger capital-gains tax.
- Confusing volatility with loss — prices move, but that’s not final.
✅ Key Takeaways
- Realised = sold = final profit or loss.
- Unrealised = still invested = paper profit or loss.
- Pocket Portfolio shows both transparently so you always know what’s real.
🔗 Further Reading & References
🧩 This article is part 1 of the “Investing Made Simple” series.
Next up: [Reading Your Portfolio Timeline Like a Pro →]
Educational content only — not financial advice.
© Pocket Portfolio 2025 · Evidence-First Investing for Everyone.
This content originally appeared on DEV Community and was authored by 22s Pocket Portfolio
22s Pocket Portfolio | Sciencx (2025-10-23T19:21:10+00:00) Realised vs Unrealised P/L — Money in Your Pocket vs Money on Paper. Retrieved from https://www.scien.cx/2025/10/23/realised-vs-unrealised-p-l-money-in-your-pocket-vs-money-on-paper-2/
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