Performance Methodology
Last updated: March 29, 2026
1. Overview
This document describes how SmartSwing calculates, displays, and reports portfolio performance metrics. Understanding this methodology is important for interpreting the data shown in your dashboard.
2. Portfolio Valuation
Portfolio value is calculated as the sum of all current position market values plus available cash. Position values are based on the most recent market prices available from Alpaca. During market hours, values update in near-real-time. Outside market hours, the last closing price is used.
3. Profit and Loss (P&L)
- Unrealized P&L: The difference between the current market value of open positions and their cost basis (average entry price multiplied by quantity held).
- Realized P&L: The actual gain or loss on closed positions, calculated as the difference between the sale proceeds and the cost basis.
- Total P&L:The sum of realized and unrealized P&L.
4. Return Calculation
Returns are calculated using the time-weighted return method where applicable. For simple display purposes, percentage return is calculated as:
Return % = (Current Portfolio Value - Total Deposits + Total Withdrawals) / Total Deposits * 100
5. What Is Included
- All executed trades (both paper and live, displayed separately)
- Dividends received (if applicable)
- Cash balances including sweep interest
6. What Is Not Included
- Taxes owed on realized gains
- The impact of future tax liabilities on net returns
- Opportunity cost of capital
- Inflation adjustment
7. Paper Trading vs. Live Trading Performance
Paper trading (simulated) performance and live trading performance are tracked and displayed separately. Paper trading results should not be considered indicative of live trading performance because:
- Paper trades execute at idealized prices without real market impact
- Spread costs and slippage are estimated, not actual
- Liquidity constraints are not fully modeled
- Emotional factors that may affect live trading decisions are absent
8. Benchmark Comparisons
When benchmark comparisons are displayed (e.g., vs. S&P 500), they use total return indices that include dividend reinvestment. Benchmark data is sourced from publicly available market data providers.
9. Historical Performance
Past performance does not guarantee future results. Historical returns shown in the dashboard reflect actual executed trades during the displayed time period. Market conditions, strategy parameters, and AI models may change over time.
10. Data Accuracy
SmartSwing makes reasonable efforts to ensure the accuracy of performance data. However, data discrepancies may occur due to price feed delays, corporate actions, or system errors. For official account records, refer to your Alpaca brokerage statements.