How Does “Marking to Market” Affect a Futures Trader’s Margin Account?
Marking to market is the daily process of adjusting a futures trader's margin account to reflect the contract's current market value. At the end of each trading day, any profits or losses are immediately credited or debited to the trader's margin account.
This daily settlement ensures that traders always have sufficient funds to cover their obligations. If the account balance falls below the maintenance margin level, a margin call is triggered, requiring the trader to deposit more funds.
