paper profit

noun

Definition of paper profit 

: a profit that can be realized only by selling something (such as a security) that has appreciated in market value

Examples of paper profit in a Sentence

Recent Examples on the Web

The Los Angeles hedge-fund firm made about $27 million in paper profits on Wednesday and about $40 million in the past week, according to people close to the matter. Gunjan Banerji, WSJ, "Hedge Funds Poised to Be Winners in AT&T-Time Warner Deal," 13 June 2018 Telegram has delivered early paper profits to investors. Coulter Jones, WSJ, "The Fuel Powering Corporate America: $2.4 Trillion in Private Fundraising," 3 Apr. 2018 To continue reading this story, TRY IT NOW AT&T booked a $20 billion paper profit in the fourth quarter on the signing of the tax bill. Rye Druzin, San Antonio Express-News, "Tax cuts mean more money, and business, for San Antonio manufacturers," 7 Feb. 2018 Those who went short on food and staples retailers, for example, made $116.3 million in paper profits on the day after Amazon announced its Whole Foods acquisition, according to IHS Markit. Ben Eisen, WSJ, "Bonfire of the Retail Stocks Brings Traders Running," 13 July 2017 But the central bank can’t lock in these paper profits by selling chunks of their cache of foreign stocks and bonds without the risk of strengthening the franc, which could leave it vulnerable to future losses. Brian Blackstone, WSJ, "For Switzerland’s Central Bank, $30 Billion in Profits but Not Much Reward," 6 Oct. 2017 One trader has booked paper profits of more than $10 million after betting on this steepening of the curve on Wednesday. Luke Kawa, Bloomberg.com, "Five Things You Need to Know to Start Your Day," 28 Sep. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'paper profit.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of paper profit

1893, in the meaning defined above

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The first known use of paper profit was in 1893

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More Definitions for paper profit

paper profit

noun

Financial Definition of paper profit

What It Is

Paper profit refers to the amount you would gain on a security if it were sold.

How It Works

Also called book profit, paper profit is the not-yet-realized amount gained on a security based on the spread between its current market price and its original purchase price.

For instance, if a bond were purchased at $600 and the current market price is $1,200, the paper profit would be $600 ($1,200 - $600 = $600).

Why It Matters

The paper profit on a held security can be calculated at any point. This can be helpful to investors as they consider selling certain assets as part of their portfolio strategy.

It's very important to note that a paper profit only turns into a realized profit when you actually sell the security.

When making a decision on your potential profit or loss, it's important to consider any fees or taxes you may incur as a result of selling.

Source: Investing Answers

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