An unrealized gain is a profit that exists only on paper, because the position is still open and has not yet been sold or settled, so the gain is not locked in.
Last reviewed 3 August 2025 · Educational, not advice
An unrealized gain is the profit you would have if you closed a position right now, while the position is still open. You bought a contract at one price, the current price is higher, and the difference is your gain on paper. The key word is on paper. Because you have not sold the contract or seen it settle, you have not turned that difference into anything you can keep. It is a measure of where you stand at this moment, calculated from the current price, and it moves up and down with every change in that price.
The contrast that makes the idea clear is with a realized gain. A gain becomes realized when you close the position, either by selling the contract to someone else or by holding it until the contract settles and pays out. At that point the paper figure becomes an actual result that lands in your balance and cannot be undone by later price moves. Until then, an unrealized gain is provisional. The number on your screen describes a possibility, not a settled fact, and the only way to convert it into a realized gain is to act.
This distinction matters because an unrealized gain can vanish. Prices in a prediction market move as people trade on new information, and a position that shows a comfortable paper profit one hour can show a smaller one, or a loss, the next. Nothing about an unrealized gain is guaranteed. Treating it as money already earned is one of the more common ways traders talk themselves into holding too long or risking more than they meant to. A clear head treats it as a snapshot that can change, not as cash in hand.
Unrealized gains and losses also sit at the centre of how a platform shows your position value and your overall profit and loss. Most interfaces mark your open positions to the current price so you can see your standing in real time, which is useful but can also feel more solid than it is. Tax treatment is a separate question that depends on your country, the product, and your situation, and the rules change, so do not assume a paper gain is or is not taxable. This page is general information, not tax advice, and you should verify the current position for your circumstances.
Suppose you bought a contract at forty cents and the current price is sixty cents. On one hundred contracts that is a twenty cent gain each, or twenty dollars, but it is unrealized while you still hold them. If you sell at sixty, the gain becomes realized and locked in. If the price instead falls back to forty five before you act, your unrealized gain shrinks to five dollars, and it could fall further or turn into a loss.
Illustrative only. Numbers are examples, exclude fees, and are not a quote or a prediction.
A paper profit is not money in hand, and treating it as if it were can lead to holding too long or risking too much. An unrealized gain can vanish before you close. Prediction markets can lose you money. Stake only what you can afford to lose, never to chase a loss, and never on borrowed money. If it stops feeling like a free choice, step back. In the United States you can call or text the helpline on 1-800-GAMBLER or visit ncpgambling.org.
An unrealized gain is a profit that exists only on paper. Your open position is worth more than you paid for it at the current price, but because you have not sold or settled, the gain is not locked in. It can grow, shrink, or disappear entirely while the position stays open.
A realized gain is locked in. It happens when you close the position by selling or when the contract settles, turning the paper figure into an actual result in your balance. An unrealized gain is still floating and can change with every tick of the price until you close.
Yes. Because it depends on the current price of an open position, a swing in the market can erase an unrealized gain or turn it into a loss before you close. It is a snapshot of where you stand right now, not money you are guaranteed to keep.
Tax treatment depends on your country, the product, and your circumstances, and the rules change. Many systems tax gains only when they are realized, but some products are treated differently. This is general information, not tax advice, so check the current rules in your region or ask a qualified professional.
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