Series 65: Combined Positions In Margin Accounts

Taken from our Series 65 Online Guide

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Combined Positions in Margin Accounts

A combined account is an account that contains both long and short positions in it. To calculate the combined equity within the account, calculate the equity of both the long and short positions and add them together.

  • • Example: Combined account.

John Robert’s account contains the following:

LMV = $65,000

SMV = $20,000

Debit balance = $40,000

Credit balance = $35,000

To find the account’s equity, start by using the relevant equations:

LMV

–

debit balance

=

equity

$65,000

–

$40,000

=

$25,000

credit balance

–

SMV

=

equity

$35,000

–

$20,000

=

$15,000

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long equity

+

short equity

=

combined equity

$25,000