Unrealized Gains Losses

Potential or real gains and losses are part of investing in stocks. Unrealized Gains or Losses occur due to changes in the Stock Price of actively held positions.

Every investor seeks to profit from investing in the Stock Market. Individual Stock positions in a Stock Portfolio can and should be Marked to Market on a regular basis, even daily. This requires that the closing price for the Stock is compared to the original purchase price or the average purchase price for the Stock, if the Stock has been purchased on multiple trades. The key is, this must be the same Security, the Security identifier (ISIN Code) must match. Until an individual stock position is sold for cash, the gain or loss remains unrealised, or more commonly termed as a paper gain or loss. An investor will continue to hold a Stock, thus not “cashing in” the unrealized gain or loss, if their expectation is the Stock Price will continue to appreciate or recover. This depends on the Valuation parameters being favourable.