Balance vs Equity
Look-alike pair
Full entries: Equity.
Balance and equity are both account values, but the single difference that matters is that balance is the cash amount excluding open positions, while equity is the total account value including floating profit or loss. Balance changes only when a position is closed or a deposit/withdrawal is made; equity changes continuously with market prices.
Side by side
| Balance | Equity | |
|---|---|---|
| Definition | Cash in the account, excluding any unrealized profit or loss from open positions. | Balance plus or minus unrealized profit or loss from open positions. |
| What changes it | Deposits, withdrawals, and closed trades. | Deposits, withdrawals, closed trades, and price movements of open positions. |
| Timing of change | Updates only when a trade is closed or a cash transaction occurs. | Updates continuously as market prices move. |
| Field mark | Usually labeled 'Balance' and shown without a floating P&L component. | Usually labeled 'Equity' and shown as the sum of balance and floating P&L. |
| Used for | Calculating available margin and free margin before considering open positions. | Determining margin level and whether a margin call or stop-out is triggered. |
| Variation by broker | The exact formula for balance may vary by broker (e.g., some include commissions immediately). | The exact formula for equity may vary by broker (e.g., some include swap or fees differently). |
Which word to use
Use balance when referring to the cash amount in the account excluding open trades, and use equity when referring to the total account value including floating profit or loss.
Family: XI · Look-alikes · Index A–Z