Account Balances

Balance: Deposits - Withdrawals + P&L of closed positions. Does not include the profit/loss of the current open positions

Available Balance: Amount available to be used. Balance + P&L of open positions - Initial Margins

P&L: The profit and loss for all open positions (Profit + Loss + Daily premium * number of days)

Equity: The current account valuation. Balance + ∑P&L

Example of an account balance:
You signed up and deposited $1000 via credit card

  • Balance: $1000. (Deposits - Withdrawals + P&L of closed positions)
  • P&L = $0. (Total profit and loss of all open positions including daily premiums)
  • Available Balance: $1000 (Balance + P&L of open positions - Initial Margins)
  • Equity: $1000 (Balance + P&L of open positions)

1.00pm - You buy 100 Oil barrels at a market price of $60.00 with a Take Profit call when Oil reaches $66.00.
The total amount you bought is: 100*$60 = $6000
The Initial Margin that is needed for Oil is 10%: $600
The Maintenance Margin that is needed to maintain an Oil position is 5%: $300

If your equity falls below $300 you will get a Margin Call.

  • Balance: $1000
  • P&L = 0 (usually the spread of Oil is 5 cents so you would have a P&L of -$5)
  • The Available Balance after you bought the Oil is: $400. ($1000 - 10%*$6000 = $400).
  • Equity is $1000 ($1000 + $0).

2:05pm - Oil jumps to $64.

  • 'Balance': $1000
  • 'P&'L: +$400. (100*$64-100*$60)
  • Available Balance: $800. ($1000 - 10%*$6000 +$400= $800).
  • Equity: $1400 ($1000 + $400).

2:15pm - Oil jumps to $66 - Balance before the Take Profit executes.

  • Balance: $1000
  • P&L: +$600. (100*$66-100 * $60)
  • Available Balance: $1000. ($1000 - 10%*$6000 + $600 = $1000)
  • Equity: $1600 ($1000 + $600)

2:15pm - Your Take Profit executes. You make $600 on the deal.

  • Balance: $1600
  • P&L: 0. (no open positions)
  • Available Balance: $1600
  • Equity: $1600