What it is:
A realized loss is a decrease in the value of an paper loss or unrealized loss -- a paper loss only turns into a realized loss when you actually sell the security.that has been sold. This concept is the opposite of
How it works (Example):
Let's assume you own 100 shares of Company XYZ that you purchased for $1,000. If the value of the decreases to $200 and you sell the shares, your realized loss equals $800.