Illustration+Table regarding Realized and Unrealized Loss in Stocks Trading System (Source: ChatGPT)

ChatGPT:

Imagine you buy 100 shares of a stock at $50 per share, meaning your total investment is $5,000.

Scenario 1: Unrealized Loss

• The stock price drops to $40 per share.
• Your new total value is 100 × $40 = $4,000.
• You have a $1,000 loss, but since you haven’t sold the stock, it’s an unrealized loss.

Scenario 2: Realized Loss

• You decide to sell all 100 shares at $40 per share.
• You receive $4,000, locking in the $1,000 loss.
• Now, it’s a realized loss, because you actually sold the stock at a lower price.

MY REAL LIFE TRADE EXAMPLE: