Account balance
Family III · Risk
Not to be confused with forex account, negative balance protection.
Account balance is the settled cash figure a trading platform reports for an account. It changes only when a position is closed, a deposit or withdrawal is processed, or a fee or adjustment is applied. It does not move with the current market price of open trades.
What the balance includes and excludes
The balance is a cash-accounting figure. It includes:
- Deposits and withdrawals.
- Realised profit and loss from closed positions.
- Commissions, swaps, and other charges already debited or credited.
- Corporate-action adjustments such as dividends on cash indices or share CFDs.
It excludes unrealised (floating) profit and loss on open positions. That component appears in equity, which equals balance plus or minus floating P&L. A position that is deeply in profit but still open leaves the balance unchanged until it is closed.
Worked example
The floating gain is invisible in the balance until the trade is closed. At that point the realised profit is added and the balance becomes 6,116.00 USD.
Balance, equity and margin
Balance is one of three related figures. Equity is balance plus floating P&L. Free margin is equity minus margin already committed to open positions. A trading platform typically displays all three, and the balance alone can understate or overstate the account's current risk capacity while trades are open.
Because balance ignores open positions, a stop-out or margin call is triggered by equity, not by balance. An account can show a healthy balance and still be close to liquidation if floating losses are large.
Often confused with
- forex account
- A forex account is the facility or agreement through which currency trades are placed, whereas account balance is the cash total recorded inside any trading account; the visible sign is that a forex account is opened and funded, while a balance is a number displayed on a statement.
- negative balance protection
- Negative balance protection is a policy that resets a negative account balance to zero after extreme losses, whereas account balance is simply the recorded cash figure and can itself become negative without such a policy; the visible sign is that negative balance protection appears as a clause or feature, while the balance appears as a monetary amount.