Long Market Value
What Is Long Market Value?
The long market value is the aggregate value, in dollars, of a group of securities held in a cash account or margin account at a broker. Long market value is calculated utilizing the prior trading day's closing prices of every security in the account, however in a liquid market, current market values on individual securities are accessible real-time.
Long market value can be appeared differently in relation to short market value, which is the aggregate worth of all net short positions held.
Seeing Long Market Value
On the off chance that an investor holds long positions, it means that they have purchased and own those securities, like shares of stocks. Long positions increase in value when the market price of those holdings go up.
Paradoxically, assuming the investor has short positions, it means that the investor has borrowed assets to sell them, and owes those securities to another person, expecting to profit off a price decline in the market. To sum up, a "long" position portrays when an investor claims a security and will profit in the event that the security ascends in price (i.e., buy low, sell high). While a "short" position is the financial term utilized when a security is "sold," without really possessing the security.
An investor can "short" a stock by borrowing the security from another holder, later buying the stock to close a position (sell high, buy low).
Long market values registered by brokerages will incorporate long positions held among most common investment vehicles, yet will frequently bar holdings in commercial paper, options, annuities, and a few precious metals. In this sense, most standard margin accounts will arrange long market value for "vanilla" or conventional securities as it were. In spite of the fact that options and comparable instruments are routinely utilized in portfolio management, they are not standard securities accessible for use with margin accounts.
Today, market value can be figured in real-time and shown as such on a broker's website or online trading platform. A few financial applications will in any case involve the prior days ending balance as the current long market value of a portfolio. That's what convention directs assuming there is no previous closing price accessible for a given asset to be remembered for the calculation, a third-party valuation or previous bid price can be utilized.
Long Market Value and Margin
A margin account is a brokerage account in which the broker loans the customer cash (known as margin) used to purchase securities. The loan is collateralized by the securities and cash that are in the account. Since the customer is investing with a broker's money instead of his own, the customer is utilizing leverage to amplify the two gains and losses.
At the point when securities are held in a margin account, and an investor gets a broker's money to buy even more on margin, the long market value is utilized by the broker to monitor the cash or equity position of an account holder. On the off chance that an account's equity balance begins to slip, on the grounds that long positions are losing value, a broker will issue a margin call to recharge equity. In the event that the margin call isn't met, the broker might be forced to liquidate the account's holdings.
Highlights
- Long market value today can be calculated in real-time, and is typically founded on changes from the previous day's closing prices.
- This will incorporate most conventional asset classes held across cash and margin accounts, yet may prohibit certain modern or exotic assets or derivatives.
- Long market value shows the net value of all long positions held by an investor or trader, as figured by their brokerage.
