On the 'Portfolio Summary' screen, there are 3 main columns: account value, buying power, and cash. This page will explain what these headings mean and how they relate to each other.
Cash - is, as you might guess, the amount of money you have in your portfolio. Cash in your account earns interest and can be used to buy stocks or options. Because the Simulator allows borrowing money to invest (margin), the cash balance can go be negative - this means you have borrowed money to invest.
Account Value - is what your portfolio is currently worth.
It is the calculated as:
= cash + market value of stocks + market value of options - market value of shorted stocks
As you can see from the above calculation, account value simply adds together all the assets in your portfolio and subtracts the short positions. (Shorts are subtracted because they are a liability and must eventually be covered). The higher the account value, the more money you've made so far. For example, if your account value rises from $100,000 to $110,000, it means that you've made $10,000 or 10%.
Buying Power - is the value of securities that you can still purchase. Buying power is different from cash because the Simulator allows you to borrow money to invest. We describe how buying power is calculated on our "how margin works" help page, however, it is worth noting that all margin calculations are done automatically, you just have to ensure that the buying power does not fall below zero or you will get a margin call.
Cash - is, as you might guess, the amount of money you have in your portfolio. Cash in your account earns interest and can be used to buy stocks or options. Because the Simulator allows borrowing money to invest (margin), the cash balance can go be negative - this means you have borrowed money to invest.
Account Value - is what your portfolio is currently worth.
It is the calculated as:
= cash + market value of stocks + market value of options - market value of shorted stocks
As you can see from the above calculation, account value simply adds together all the assets in your portfolio and subtracts the short positions. (Shorts are subtracted because they are a liability and must eventually be covered). The higher the account value, the more money you've made so far. For example, if your account value rises from $100,000 to $110,000, it means that you've made $10,000 or 10%.
Buying Power - is the value of securities that you can still purchase. Buying power is different from cash because the Simulator allows you to borrow money to invest. We describe how buying power is calculated on our "how margin works" help page, however, it is worth noting that all margin calculations are done automatically, you just have to ensure that the buying power does not fall below zero or you will get a margin call.