The daily process of revaluing open futures positions to reflect the day's closing price, settling gains and losses.
Mark to market (MTM) is the practice of adjusting the value of an open futures position at the end of each trading day based on that day’s settlement price. Any profit or loss since the previous day’s settlement is credited or debited to the trader’s account in cash. This daily settlement process reduces counterparty risk in the futures market and means traders need sufficient funds available to cover adverse MTM movements.
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