> For the complete documentation index, see [llms.txt](https://risk.infinity.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://risk.infinity.exchange/portfolio-margin/framework.md).

# Framework

Each user's Trading Account is used to initiate and maintain lending and/or borrowing positions. Your Trading Account contains cash tokens, lending and borrowing positions on floating and fixed rate contracts.

**Assets** (denoted, "A"), refers to your aggregate Long (Cash + Lending) positions, while **Liabilities** (denoted "L"), refers to your aggregate Shorts (Borrowing) positions. Cash refers to any tokens in your Trading Account that is not in a lending or borrowing position.

Cash is valued at 100%, and compromises:

* Deposits/Withdrawal from the user
* Realized gains/losses from lending and borrowing positions opened then closed, or expired 
* Tokens received by initiating a borrowing position, or withdrawn by a lending position
* Interest paid/received on fixed rate position, or when exiting a floating rate position

Positions refer to either Lending or Borrowing positions, initiated either with a Market Order or a Limit Order that was matched.

For both lending and borrowing positions, we value the position by taking its **Present Value** (denoted, "PV"). For a detailed breakdown of the PV calculation, please refer [here](https://faq.infinity.exchange/product-guide/fixed-rate-markets#valuation). 

The **Net Asset Value** (denoted, "NAV") of your Trading Account is the sum of:

* Assets (A)
  * Cash
  * PV of your lending positions (designated with a positive value)
* Liabilities (L)
  * PV of your borrowing positions (designated with a negative value)

Each user should remain cognisant of their NAV, as this is used to calculate their portfolio value for the purposes of [Maintenance Margin](/portfolio-margin/maintenance-margin.md) under their Portfolio Margin.

Below is a summary of the main terms used and their definitions:

<table><thead><tr><th width="131.5">Abb.</th><th width="156">Term</th><th>Definitions</th></tr></thead><tbody><tr><td>Cash</td><td>Cash</td><td>Token not held in a lending or borrowing position.</td></tr><tr><td>Pos.</td><td>Position</td><td>Lending or borrowing positions, floating or fixed rate contracts.</td></tr><tr><td>PV</td><td>Present Value</td><td>PV is the sum of the position's cash-flow discounted.</td></tr><tr><td>A</td><td>Asset</td><td>Cash + PV(Lending Pos.)</td></tr><tr><td>L</td><td>Liability</td><td>PV(Borrowing Pos.)</td></tr><tr><td>NAV</td><td>Net Asset Value</td><td>NAV = A + L</td></tr></tbody></table>

Note: under the Portfolio Margin approach, each borrowing position is valued against the Assets in your Trading Account, and not a specific standalone asset. This approach introduces margining metrics such as Maintenance Margin and Initial Margin, along with Health Score and Max Borrow metrics. These terms are important to understand and defined in the following pages.


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