What Is Mark-to-Market?
The daily process of adjusting a futures position to reflect current market prices, resulting in cash gains or losses credited or debited to the trader's account. This settlement mechanism reduces the risk of default by ensuring margin accounts remain adequately funded.
Mark-to-Market across 2 exams
Mark-to-Market appears on the following exams. Each defines it in the context candidates are tested on:
- Series 3
- The daily process of adjusting a futures position to reflect current market prices, resulting in cash gains or losses credited or debited to the trader's account. This settlement mechanism reduces the risk of default by ensuring margin accounts remain adequately funded.
- Series 31
- The daily cash settlement process in futures where gains and losses are calculated at the end of each trading day using the settlement price. Funds and trading accounts are credited or debited daily, affecting the investor's equity balance and margin requirements without waiting for position closure.