P&L

P&L stands for profit and loss. In everyday trading use, it means the amount of money you have made or lost, either on a single trade, a day's session, or over a longer stretch like a week or month. It is a running scorecard measured in dollars (or whatever currency you trade in), not percentage or points, though many traders track both.

For a day trader, P&L comes in two flavors: realized and unrealized. Realized P&L is money you have actually locked in by closing a position — you bought at 50, sold at 52, and that $2 per share is booked and done. Unrealized P&L, sometimes called "open P&L" or "paper P&L," is the gain or loss on a position you are still holding; it moves with the market tick by tick and only becomes real once you exit.

The nuance that trips up beginners is that unrealized P&L feels emotionally like realized P&L, but it isn't. A position showing a $500 gain can turn into a $200 loss before you click sell, and nothing is guaranteed until the trade is closed. People also confuse gross P&L (the raw price difference) with net P&L, which subtracts commissions, fees, and sometimes borrowing costs for short positions — net is what actually lands in the account.

The term borrowed from corporate accounting, where the "P&L statement" is a formal report of a company's revenue and expenses over a period. Traders shortened the concept to mean their own personal running total, which is why the same two letters can refer to a giant company's income statement or to the $47 you made on a single trade in AAPL this morning.