Realised gain

The difference between what an asset actually sold for and its cost basis - a completed exchange that nothing afterwards can change.

Example

Selling 2,000 shares at 31.00 that cost 12.00 realises 62,000 less 24,000, a gain of 38,000.

Important

It is a different kind of claim from an unrealised gain, not the same claim held with more confidence. One has been tested by a buyer; the other has been asserted.

Related terms

• Unrealised gain — The difference between what an asset is currently marked at and its cost basis, where no sale has taken place.
• Cost basis — What an investment actually cost you: the purchase price plus every fee, tax and expense required to acquire it and make it usable.
• DPI (distributions to paid-in) — A fund multiple counting only money actually paid back to investors, divided by the capital they paid in.

Lessons that explain it

• For most alternatives, the entire return is one number: the exit price minus everything paid to get there — Without a dividend or a coupon, appreciation is the whole story for art, wine and watches - and it only becomes real at an actual sale. Farmland and royalty interests instead compound the way an income-producing asset does, cash paid out year after year. (11 min)
• Realised and unrealised: a mark is not money — An unrealised gain is somebody's opinion of what an asset would fetch. A realised one is what it did fetch. The distance between them is where a great many returns go to die. (10 min)

All 578 terms in the Investing glossary