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How Does “Marking to Market” Affect a Futures Trader’s Margin Account?

Marking to market is the daily settlement of profits and losses, adjusting the margin account balance.
Greeks.live05.12.25

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.

Explain the Concept of ‘Marking-to-Market’ in the Context of Futures Contracts
How Does the Concept of Daily Mark-to-Market Affect a Futures Trader’s Margin Account?
Why Is Daily Settlement Necessary for Exchange-Traded Derivatives?
How Does Marking-to-Market Work in the Context of Futures Contracts?
What Is the Concept of “Marking to Market” in Futures Accounting?
How Does the Clearing House Manage the Daily Settlement Process for Futures?
Why Do Futures Exchanges Require Daily ‘Marking to Market’?
How Does Daily Settlement in Futures Affect the Cash Flow for a Trader?

Glossar

Trader's Margin

Constraint ⎊ This denotes a variable within a trading model or risk management framework that is set exogenously and is not subject to dynamic adjustment based on market conditions.

Margin Account

Leverage ⎊ A margin account in cryptocurrency, options, and derivatives trading represents an equity-backed loan from a broker, enabling traders to control a larger position than their available capital would otherwise permit.

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