In plain English
What Realized profit and loss means
Realized P&L is the amount that is actually locked in after a trade is closed. It becomes part of the account balance, unlike unrealized P&L, which changes while positions remain open. In tax and statement reporting, realized gains and losses are usually shown separately from unrealized changes.
Why it matters
Realized P&L is the clearest measure of what a trade has actually produced. It is used to track performance, calculate taxes, and update account balance after closure.
Example
If you buy EUR/USD and later close the trade for a $150 gain after costs, the realized profit is $150. If the trade instead closes for a $90 loss, the realized loss is $90. This is simplified and excludes financing and slippage.
Quick answers
Common questions
When does profit become realized?+
When the position is closed, or when a transaction otherwise fixes the gain or loss so it is no longer open to market movement.
Is realized P&L the same as cash in the account?+
Usually it flows into balance, but withdrawals, deposits, fees, and financing charges can affect the actual cash available.
Sources