What is Unrealized profit or loss (PnL)?

Unrealized profit or loss (PnL) is a term used in accounting to refer to the current profit or loss on an investment that has not yet been sold or realized. Unrealized PnL is the difference between the current market value of an investment and the original purchase price.

For example, if you buy a stock for $100 and it is currently worth $110, your unrealized PnL would be a profit of $10. However, if the stock is worth $90, your unrealized PnL would be a loss of $10.

Unrealized PnL is considered "unrealized" because it is not considered a realized gain or loss until the investment is actually sold. Until that time, the profit or loss is only on paper and has not yet been realized in the form of actual cash.

Unrealized PnL can be an important metric for investors, as it provides an indication of the current value of their investments and can help inform decisions about when to sell or hold onto an investment.


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