remaining after all deductions from, or adjustments
to, a gross
figure have been made.
The weight of your assets is the amount of each security
in your portfolio
relative to the entire portfolio. Weight changes
depending on whether you're selling short or long. With a little practice
, it's easy to tell the difference between gross weight
vs net weight.
Gross weight is easy to determine. If you have a portfolio that consists of $13,000 long and $3,000 short positions, then you have a total investment of $16,000.
The gross weight of your long position
is 81.25%, and the gross weight of your short position
is 18.75%. In order
to find gross weight, you need
to divide the amount of any given security by the amount of total securities held
. It's up to you whether you want
to use dollar values
or shares as the metric for comparison.
Net weight is slightly more complicated to figure. In our example, we have a portfolio with $3,000 long and $2,000 tied up in short positions. In this case, the net weight of our long positions is +130 and the net weight for our short position is -30. The net weight is based on the total value of your portfolio, and looks at long investments as positive and short investments as negative. The two numbers will always add up to the net of 100.