What is equity?
What is equity?Technically equity is a made up number based on what the current market price for something may be.
Ie if you have a house and the current market value your house is £500,000 and you have a mortgage of £300,000 your potential profit (equity) would be £200,000. That is considered equity. However it is a made up number as it is nothing until the house is sold. It can go up and down a thousand times but the true value of it will not be known until the house is sold.
Many people do trade on equity but that can be risky as equity can go up or down depending on market values.
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