What is realised profit and loss?

Realised profit or loss is the actual gain or loss you’ve locked in from a position you’ve fully closed, meaning you’ve both bought and sold (or sold and bought back, for a short position) the same quantity of a stock or contract, and the trade is done. It’s calculated using the actual executed prices and includes all applicable charges, brokerage, taxes, and fees, giving you the true, final number for that specific trade rather than a paper estimate. This is different from unrealised profit or loss, which reflects the current value of a position you still hold, based on the current market price versus your average buy price, but hasn’t actually been locked in through a sale yet. Realised P&L is what actually matters for tax purposes and for measuring your genuine trading performance over a period, since an unrealised gain can still disappear if the market moves against you before you sell.