Equity definition

In trading, equity can mean several different things. However it usually comes down to the ownership of an asset without any debt involved.

When engaging in leveraged margin trading, your equity is the total value of your open positions minus the total amount of debt used to open those positions.

Equity can also refer to an asset class, or the shares of companies that together add up to its total ownership (also known as stocks). Share traders can be known as equity traders, and the buying of shares in a company can be known as taking part of its equity.

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The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA, a SIPP or an IG Smart Portfolio can fall as well as rise, which could mean getting back less than you originally put in. Spread bets and CFDs are leveraged products and can result in losses that exceed deposits. Spread betting and CFD trading are not permitted within the IG SIPP. Please ensure you fully understand the risks and take care to manage your exposure.

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