This article has been translated from English to Gen Z Slang.
In trading, "account value," which the cool kids also call "account equity," is just the total vibe of your trading account at any given moment. 💰
It's basically the bag—you know, the total cash and swag (like securities) you got in your trading account, counting both your big wins and savage lows, whether you've cashed out or nah. 📈📉
Here's how ya calculate that sweet, sweet account value:
- Cash: All the dollar bills y’all initially dropped in your account and any extra schmoney you've thrown in since then.
- Value of Securities: Think of this as your stocks playlist—current bangers (market value) of any stocks, bonds, options, or whatever you’re vibin’ with in that account.
- Realized Profits or Losses: These are the glow-ups or ghost moments from trades you've actually completed. Cashed that check? Your account dances. 😎 Messed up? Well, ya walked away with less clout.
- Unrealized Profits or Losses: It’s like potential 💸 goals from trades that are still live. Haven’t hit the sell button yet? Price up? You’re sitting on a potential power move. Price down? Oof, got an unrealized L. These affect your account's drip but aren’t locked in till you seal the deal.
- Minus Any Fees and Commissions: Because, yeah, adulting sucks—trading comes with those not-so-welcome fees and commissions from your broker, so you gotta subtract that from your total bag.
Traders keep a laser focus on their account value since it literally shows how much they’re slaying the trading game. Keep gaining? You’re probably killing it. Account dipping? Might wanna switch up that strategy, fam. 🚀
And it’s crucial because tons of trading moves, like snapping stocks on margin or playing the short game, mean you gotta keep your account value from dipping below the line. 📏