You bought GE at 10 bucks a share. You have held it a few years now and it's at $30. Nice big fat hefty gain. The problem is that it now represents almost 30% of all of your holdings. So you want to sell half and take off some GE-specific risk. When you sell, you will "realize a gain" of $20 a share. Converting stock into cash is "realizing". If you'd just held and not sold, the gain would be "un-realized". You aren't taxed in the U.S. on unrealized gains (but you can be in some other countries).