Identifier: C5T2L4 · Revision: 2026-10-26 · Classification: domestic

Decision and objectives

The practical task is to build a dated portfolio cash budget through a market gap. Make the decision reproducible: name the exposure, time horizon, cash requirement and comparison baseline before selecting a product.

Objectives: Build a dated portfolio cash budget through a market gap; Separate market drawdown from collateral transfers; Identify inaccessible wealth before a funding deadline.

Prerequisite: C5T2L3; completed Classes 1–4 and the Stock Market School foundation or Forex School foundation. Every example is hypothetical. Prices, dates, rates, fees, contract factors, policies and tax schedules are supplied teaching inputs, not current offers or legal parameters. No live account is needed.

Mechanics

Portfolio drawdown measures decline from a prior value peak; funding need measures cash required by date. A pledged deposit remains an asset, while a derivative settlement loss reduces wealth. An extra collateral transfer reduces free cash without itself being a market loss. Fund redemption, share-sale settlement and bank transfers can all arrive after a same-day debit.

Use separate columns for economic wealth, free transferable cash, pledged eligible collateral and pending proceeds. A positive total can coexist with a missed obligation. A stop or intended asset sale supplies no cash until executed and settled.

Price and return drivers

Dated available cash = starting free cash + cash actually received − settled losses − incremental collateral − costs − spending. Peak liquidity need depends on the sequence, not only the final net result. Recovery after a drawdown d requires d/(1 − d) return to the old peak, before new flows and costs.

Worked case

Hypothetical total wealth TRY 1,000,000 includes TRY 200,000 free cash, TRY 100,000 initial futures collateral and TRY 700,000 other assets. Day 1 a futures settlement debits TRY 40,000 and additional required collateral is TRY 30,000; transfer both from free cash under the supplied policy, leaving TRY 130,000. Day 2 settlement loss TRY 25,000, another incremental collateral TRY 20,000 and paid costs TRY 5,000 leave TRY 80,000 free. A household payment TRY 70,000 due before any asset sale settles leaves TRY 10,000. Extra collateral TRY 50,000 is still pledged wealth; settled losses TRY 65,000 and costs TRY 5,000 reduce wealth to TRY 930,000 before the household withdrawal.

Adverse case

A further TRY 30,000 intraday debit before redemption proceeds arrive creates TRY 20,000 shortfall after the payment. A fund worth TRY 150,000 with supplied T+2 cash cannot cure today's gap. Separately a 20% portfolio drawdown needs 25% recovery, not 20%, to regain its prior peak. The investor may be solvent at the ending mark yet need to reduce exposure earlier to preserve payment ability.

Practical use

Verify actual withdrawal and settlement times, collateral cash versus noncash requirements, member add-ons, redemption cutoffs, bank holidays and committed credit. Model reserve interest or emergency financing as an economic cost. Do not count a deposit once as emergency spending money and again as derivative collateral. Use synthetic records; no learner needs to make a transfer.

Use permitted domestic access routes and the actual instrument documents. Verify intermediary authority, investor eligibility, order/redemption terms, settlement, custody and executable size before implementation. Reconcile spread and commissions, funding, collateral, custody, product expenses, conversion and exit charges; an amount already embedded in a fill or fund unit price is not deducted again. A published mark or product description does not promise an executable price or liquidity.

Tax is excluded unless a numerical schedule is expressly supplied as hypothetical. For actual rules record income year, residence and individual/corporate status, instrument and acquisition/contract dates, taxable event and rule effective date. The GIB investment-income guide, checked 2026-10-26, covers 2025 individual income; its 2026 publication date alone cannot settle a 2026 liability.

Decision boundaries

Choose a smaller hedge or earlier conversion to cash if the plan has no acceptable bridge. A baseline with more cash can be rational even if expected return is lower. Decline a strategy requiring future sale proceeds to meet an earlier firm deadline without committed funding.

Practice and references

Exercise: hypothetical free cash TRY 90,000; loss settlement TRY 25,000; incremental collateral TRY 15,000; spending TRY 40,000; costs TRY 2,000. Solution: free cash TRY 8,000. A further TRY 12,000 debit creates TRY 4,000 gap. Collateral transfer is not a second market loss; wealth falls by TRY 27,000 before spending, not TRY 42,000.

Takeaway: Identify inaccessible wealth before a funding deadline with the cash dates, costs and remaining risks stated.

Product card: portfolio-decision-record. Formula: Dated free cash balance. Glossary: Drawdown, Free cash. Next lesson: C5T2L5. Topic test.

Sources checked 2026-10-26:

Additional formulas: drawdown-recovery.

Shared reference guide