Point Balance
What Is Point Balance?
A point balance is a statement delivered consistently by futures brokers that shows the unrealized profits and losses on a client's open futures contracts.
Understanding Point Balance
Futures financiers, or futures commission merchants (FCMs), are required by federal regulations to issue the point balance statements, either on the last business day of every month or any customary month to month date. The point balances depend on the official closing or settlement prices of futures contracts held in a financial backer's portfolio. This gives an outline of the overall portfolio condition.
The point balance statement shows the latest prices and measures of both long and short open futures contracts.
Financiers are additionally required under federal regulations to issue comparable statements every month for open commodity options transactions. With options trades, in any case, the contracts can be arranged by delivery date, expiration date, and strike price.
Benefits of Creating a Point Balance
A point balance statement can be valuable for both the account holder and the FCMs in light of the fact that it provides the two players with a perspective on the wellbeing of some random investment portfolio or trading account.
Similar as an account balance, this can be useful for an account holder who doesn't follow the market — and the profit or loss on some random investment — consistently. Likewise, point balance statements can give FCMs, which frequently give margin loans to account holders, a check of the strength of its client's trading accounts.
Features
- A point balance is a statement delivered each calendar month showing the profits and losses of a client's open futures contracts.
- Futures businesses, or futures commission dealers (FCM), are required by federal regulations to issue the point balance statements.
- The point balances depend on the official closing or settlement prices of futures contracts held in a financial backer's portfolio.
