A Realized Gain is a profit that an investor has earned by selling an asset for more than the price at which it was purchased. This means that the investor has converted the asset into cash, and the gain is considered to be "realized."For example, if an investor buys a stock for $50 and then sells it for $60, the investor has realized a gain of $10. This gain is considered to be realized because the investor has converted the stock into cash by selling it.An unrealized gain, on the other hand, is a profit that an investor has made on an asset that has not yet been sold. This means that the asset is still owned by the investor, and the gain is not yet realized.For example, if an investor buys a stock for $50 and the stock's market price increases to $60, the investor has an unrealized gain of $10. This gain is considered to be unrealized because the investor has not yet sold the stock and converted it into cash.Realized and unrealized gains are important concepts in investing because they affect an investor's overall financial situation. Realized gains can be taxed as capital gains, while unrealized gains are not taxed until the asset is sold and the gain is realized.
