Learn what open trade equity measures, how it is marked in trading accounts, and why it changes before a position is closed.
Open trade equity (OTE) is the unrealized profit or loss on a position that is still open.
It reflects what the position would be worth if it were closed at current market prices.
OTE is usually updated using mark-to-market pricing. If the market moves in favor of the trader, OTE rises; if the market moves against the trader, OTE falls. Because the position is still open, the gain or loss is not yet realized, but it can still affect margin, risk limits, and decision-making.
The concept matters because traders and risk managers monitor OTE to understand current exposure before positions are closed. A position with strong positive OTE may still reverse, while a loss can trigger margin pressure before any exit occurs.