Unrealized gain or loss on open futures or derivatives positions, calculated from the position's entry price and current mark.
Open trade equity (OTE) is the unrealized gain or loss on open futures or other marked derivatives positions. It changes as the contract’s current mark changes and can affect account equity, margin capacity, and liquidation risk before the position is closed.
For a long position:
For a short position:
Where:
Real statements may also reflect commissions, fees, currency conversion, option value, spread treatment, and position netting separately. The platform’s mark and contract specification must be checked before reconciling the number.
Assume a trader is long three futures contracts with:
102.40103.15$100 per full price point3The long position has positive OTE of $225. If the trader were short the same contracts at 102.40, the OTE at a 103.15 mark would be -$225.
The figure remains sensitive to the mark. If the long position’s mark falls to 101.90:
The account moved from a $225 unrealized gain to a $150 unrealized loss without the position being closed.
The National Futures Association’s margin terminology describes net liquidating equity as the sum of ledger balance, open trade equity, and net option value:
1net liquidating equity = ledger balance + OTE + net option value
This relationship explains why open losses can create margin pressure before a trade is closed. It does not mean positive OTE is necessarily withdrawable cash. Brokers and clearing firms apply product-specific settlement, collateral, offset, hold, and withdrawal rules.
| Account item | What it represents | Main distinction |
|---|---|---|
| Ledger balance | Posted cash entries and settled account activity | Does not by itself show current open-position value |
| Open trade equity | Unrealized gain or loss on open marked positions | Changes with the mark and disappears or is transformed when positions close or settle |
| Net option value | Current value of option positions under the account method | Separate from futures OTE in many statements |
| Net liquidating equity | Estimated residual account value under the statement method | Not automatically equal to cash available for withdrawal |
| Margin requirement | Collateral required to support positions | A requirement, not profit or account value |
Mark-to-Market updates position value using a designated mark. In futures accounts, gains and losses may also be settled through daily or intraday variation settlement.
After settlement, an amount previously shown as open trade equity may be reflected in ledger or cash balances, while OTE begins changing again from the new settlement reference or for trades opened afterward. Exact labels differ among futures commission merchants, clearing systems, and account statements. A reader should not assume every platform carries yesterday’s OTE in the same field.
Commissions and financing costs can reduce the account’s economic result even when they are not included in the displayed OTE field.
OTE applies while exposure remains open. Closing or settling the position turns the relevant amount into realized or settled account activity, subject to fees and the execution price.
Open interest counts outstanding contracts across the market. OTE is a dollar gain or loss associated with positions in one account. Similar wording does not make them related calculations.
Buying power is an account-specific estimate of additional transaction capacity. Positive OTE may affect it, but requirements, offsets, open orders, concentration, and house rules also matter.
A Margin Call can occur when losses reduce account support below an applicable requirement. A broker or clearing firm may liquidate positions according to the agreement and rules; OTE does not guarantee advance notice.
This page is for financial education and does not recommend a futures, derivatives, leveraged, or margin position.