Market value is the current worth of an asset or open position based on the prevailing market price. For a trader holding an open position, market value is calculated by multiplying the current price of the instrument by the position size. As market prices move, the market value of the position moves with them, which is why open positions are described as marked to market throughout the trading day.
For prop firm traders, market value determines the real-time equity of a funded account. When a trader has open positions, account equity is the cash balance plus the market value of those positions, minus any pending fees or margin held. Firms that calculate drawdown against equity rather than balance alone use the market value continuously, meaning an open position that moves against the trader can push the account toward a drawdown breach before the position is closed. Firms that calculate drawdown against balance only apply the change once positions are closed.