Definition

Equity

Meaning ⎊ The net value of an account including settled funds and unrealized gains or losses.
Greeks.liveMarch 19, 2026

Equity

Equity in a trading account is the total value of the account if all open positions were closed at the current market price. It is calculated by taking the sum of the account balance and the unrealized profit or loss from all open positions.

Equity represents the true net worth of the trader at any given moment. Unlike the cash balance, which only tracks settled funds, equity reflects the immediate impact of market volatility.

It is the primary metric used to determine whether a trader meets margin requirements. If equity drops significantly, it directly reduces the available margin, limiting the ability to open new trades.

Maintaining sufficient equity is the foundation of long-term survival in derivatives trading. It is the dynamic measure of account health.

Zero Equity
Unrealized PnL
Capital Requirement
Account Balance
Capital Injection
Equity Cost Analysis
Equity Threshold
Cross-Margin Accounts

Glossary

Account Asset Value

Valuation ⎊ The account asset value represents the aggregated market worth of all holdings within a trading account, encompassing cash, cryptocurrencies, and derivative positions.

Net Liquidation Value

Calculation ⎊ Net Liquidation Value represents the theoretical cash amount realized from closing all open positions within a trading account, factoring in prevailing market prices and associated costs.

Trading Position Equity

Equity ⎊ The concept of Trading Position Equity, within cryptocurrency derivatives and options markets, represents the intrinsic value attributable to an open position, reflecting the difference between the current market value of the underlying asset and the cost basis of that position.

Network Data Evaluation

Analysis ⎊ Network Data Evaluation, within cryptocurrency, options, and derivatives, represents a systematic examination of on-chain and off-chain datasets to derive actionable intelligence regarding market behavior and risk exposure.

Volatility-Adjusted Returns

Return ⎊ Volatility-Adjusted Returns, frequently abbreviated as VAR, represent a refinement of traditional return metrics, particularly crucial within the dynamic landscape of cryptocurrency derivatives and options trading.

Know Your Customer Procedures

Compliance ⎊ Know Your Customer Procedures within cryptocurrency, options, and derivatives markets necessitate verifying client identities and assessing associated risks to adhere to anti-money laundering and counter-terrorist financing regulations.

Currency Exchange Rate Fluctuations

Currency ⎊ Fluctuations in cryptocurrency markets stem from a complex interplay of factors distinct from traditional fiat currency exchange rates.

Regulatory Arbitrage Effects

Arbitrage ⎊ ⎊ Regulatory arbitrage effects in cryptocurrency, options, and derivatives markets represent the exploitation of discrepancies in pricing or regulatory treatment across different jurisdictions or exchanges.

Clearinghouse Risk Management

Risk ⎊ Within the context of cryptocurrency, options trading, and financial derivatives, clearinghouse risk management represents a layered framework designed to mitigate counterparty and systemic exposures arising from complex, often volatile, instruments.

Margin Engine Functionality

Algorithm ⎊ The core of a margin engine functionality resides in its algorithmic design, dictating how collateral requirements are dynamically adjusted based on market conditions and risk parameters.