How are realized profits different from unrealized or so-called "paper" profits?

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October 2016
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Realized profits are gains you actually "nail down" by selling a stock or fund for a price that is higher than what you paid for it. You have unrealized profits when you are holding a stock or fund that is currently trading at a price that is higher than what you paid for it. You have to actually sell a position with unrealized gains in order to have realized gains. When you have realized gains, they can't disappear. Unrealized gains can evaporate if the current price falls to a level below what you paid.

October 2016
October 2016
April 2006