How to Read a Portfolio SMG Info

Account Summary The Account Summary displays portfolio information as of today. If a number is red and parenthesis, it means a NEGATIVE number. The value of shorts will always be in red because it reflects the amount of money that would be required to cover that day.

Cash Balance The Cash Balance is the amount of cash left from the initial $100,000. This includes dividends, interest and proceeds from sales of stock.

Value of Longs & Total Equity The value of Longs is the current value of all stocks held in a long position. Those that were bought. TOTAL EQUITY is the sum of the Cash Balance plus the value of the longs. TOTAL EQUITY determines rankings in the SMG.

Buying Power Shows the total amount of money available for stock purchases and short sales when fully extended on margin. Formula: Buying Power = Available Equity X 2.

Minimum Maintenance Is the minimum margin requirement. (30%) that a team must maintain after borrowing on margin. If total equity falls beneath 30% value of long and short – you get a MARGIN CALL.

Net Interest Is the amount of interest received on a cash balance minus any interest paid on a margin loan.

Percent Return Reflects the realized gains or losses as a percent of the initial $100,000. Percent Return = net equity gain / 100,000 -$2,085 = / 100,000

Short Selling Short selling occurs when you BORROW stock from a broker, which you sell, hoping to buy it back at a LOWER price and return it to the broker for a profit.

Short Selling Borrow shares of stock. There is a difference between buying and borrowing. Buying – the shares are yours to keep. Borrowing – you must return them at a given point.

Steps for Short Selling Borrow shares of stock from your broker. Sell the shares you borrow. Wait for the price of the stocks to DROP. Buy back the shares you borrowed.

Short Selling = Russian Roulette If the stock price RISES, instead of drops – you will spend MORE money to get the stocks back. Profit only if you buy them back cheaper than you sold them.

Questions to ask BEFORE short selling. Does the stock show earnings gains or improving profit trend? If it does, it is a good sign the price will probably NOT drop. Has the stock had a dramatic decline? If so, harder to sell a stock. Does the stock have a current price not above its average price from the past 200 days? Likely the stock’s price will not fall for your short sell.

SHORT COVER The act of repurchasing stock that has been borrowed and sold.