In plain English
What Account equity means
Equity reflects what the account would be worth if open positions were marked to market at current prices. Because prices move before trades are closed, equity can rise above or fall below balance at any moment. In leveraged trading, equity is a key input for margin monitoring and risk checks.
Why it matters
Equity shows the live state of an account, which matters for margin, stop-out logic, and available trading capacity. It is often the number that matters most when the market is moving.
Example
If an account balance is $10,000 and open trades show an unrealized gain of $300 and an unrealized loss of $100, equity is $10,200. This simplified example ignores fees, financing, and spread.
Quick answers
Common questions
Is equity the same as net worth?+
Not exactly. In a trading account, equity is the current account value including open positions, while net worth is a broader personal financial measure.
Why can equity fall below balance?+
Because open positions can show unrealized losses that reduce the account’s current value.
Sources