Zerodha happens to be one of the biggest stockbrokers in the country, offering surplus features and a simple trading experience. It’s for good reasons that the stockbroker has undoubtedly amassed millions of active users over a very short period. However, you might need some time to understand the applications and use them if you’re a beginner.

But when it comes to the basics, then it’s quite straightforward and simple. Normally, you would enter a trade when the prices might be lower and sell it when the prices might be higher. That the typical way, any trade is executed. However, while using Zerodha, you might have noticed that your profits are divided into two spectrums. One is unrealized, and another is realized P&L statement. Now to understand what it is, we have illustrated it in detail below.

P&L statement

P&L statements are part of the Zerodha console’s feature, where one can easily figure out the number of trades executed over time and the profit or loss made during each day. It’s a quiet and intuitive feature considering that you can track your trades and even see the intensity of profits or loss made. P&L statement stands for the profits and loss statement made for any particular day, week or month, and even year. Therefore, it isn’t segregated into different segments, but all the trades (irrespective of segments) is listed here and denoted in green or red based on profit and loss.

Realized P&L

Realized P&L statements is the amount of profit or loss that has been booked. It gives a representation of the profit or loss you made in a trade after closing it. These are trades executed in different segments of the stock markets. However, the realized P&L statements is often projected without the brokerage charges. Therefore, once the brokerage changes are included based on the type of trade and the number of trade, the net realized P&L statement might vary.

Unrealized P&L

Unrealized P&L statements are a statement in which users can notice the active trades or running holdings. Its where all the segments that the investor might have invested in notice their trades and can witness the average trade volume, highest/lowest share prices, and so on. It’s a sheet giving real-time profit and loss that your trades are making. Most often, these showcase the P&L statement without brokerage charges. A detailed overview of this can be found in your portfolio or holdings section. If you want the broker that you might incur for unrealized P&L when you realize them, that should be displayed under your Zerodha console section.

When the trade is squared off, realized profit is computed. In this, all the intraday trades and F&O positions are considered. CNC trade has no impact on the realized profit of a day. But the P/L of intraday CNC has an impact. Unrealized profit on the other hand is computer considering the market to market positions, including F&O, intraday equity etc.

Here is an example:

Position A shows loss of 100/- while Position B shows profits of 50/-. Here an unrealized profit of 50/- is generated. This unrealized portion will be reduced from the margin.

Bottom line

Realized and unrealized P&L statements are quite beneficial in helping investors and traders understand how much they have made in a day’s trade or single trading endeavor. It’s a way to manage your trades and understand how much you might be taking home after a successful trading day. Furthermore, these attributes also help understand how many trades have been executed and what your brokerage charge might be based on the amount and number of trades executed.