"There is no profit/loss until you close the position"
Is this true?
But surely if the present value of your portfolio has increased then you are in profit since you can instantly convert that profit into cash.
Yes but I would go further...a profit is not a profit until it has been removed from the trading account...thus taken out of the equation and not subjected to further speculation.
Yes but I would go further...a profit is not a profit until it has been removed from the trading account...thus taken out of the equation and not subjected to further speculation.
But surely if the present value of your portfolio has increased then you are in profit since you can instantly convert that profit into cash.
"There is no profit/loss until you close the position"
Is this true?
I understand the point you are making. But the fact that the on paper profit can be converted to cash immediately surely means that you are in profit. You may not stay in profit when greed gets the better of you but at that moment you are in profit.
I think what I am saying is that the money in your account is completely liquid. And therefore the fact that it is not in cash is, in my opinion, irrelevant since it can instantly become cash.
Wrong - there is no guarantee at all that you can "instantly" turn that profit into cash.But surely if the present value of your portfolio has increased then you are in profit since you can instantly convert that profit into cash.