What Is Unrealised profit and loss?

Unrealized Profit and Loss refer to the theoretical gains or losses on an investment or asset that has not yet been sold or closed. These are “paper” profits or losses, meaning they exist only on paper and have not been actualized through a transaction. An “unrealized profit” occurs when the current market value of an asset is higher than its purchase price, while an “unrealized loss” occurs when the current market value is lower than the purchase price. Unlike realized profits and losses, unrealized amounts are not recorded as income or loss for tax purposes until they are realized through a sale or other transaction.

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