Glossary · Fund Accounting
Open Trade Equity (OTE)
Open trade equity is the unrealized profit or loss on open futures and other exchange-traded derivative positions, measured as the difference between trade price and current settlement price.
OTE appears on futures commission merchant (FCM) and clearing broker statements alongside cash balances. For each open contract it is calculated as (current settlement price − trade price) × contract multiplier × number of contracts, with the sign reversed for short positions. Total account equity equals cash balance plus OTE.
Because futures are marked to market daily through variation margin, the cash balance already reflects accumulated daily settlements, and OTE shows the gain or loss since trade inception. Fund accounting systems may model futures either as daily realized settlements or as a single unrealized position; the chosen method must be applied consistently so that cash and unrealized P&L are not counted twice.
OTE is a standard line in position reconciliation and cash reconciliation against broker statements. Breaks usually come from settlement-price source differences, incorrect contract multipliers in the security master, or roll trades booked on different dates.
Example
A fund buys 10 equity index futures at 5,000.00 with a multiplier of 50. The next settlement price is 5,020.00. OTE is (5,020 − 5,000) × 50 × 10 = USD 10,000.
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