How Is the 'Marking-to-Market' Process Performed for Futures Contracts? ▴ Learn

How Is the ‘Marking-to-Market’ Process Performed for Futures Contracts?

Marking-to-market (MTM) is the daily process of adjusting the value of a futures contract to its current market price. At the end of each trading day, the profit or loss is calculated based on the difference between the contract's previous day's settlement price and the current day's settlement price.

This profit or loss is then credited or debited to the trader's margin account as variation margin.

Why Is the Variation Margin Process Not Typically Applied to Options Buyers?

What Are the Main Differences between Initial Margin and Variation Margin in Derivatives Trading?

What Is the Difference between ‘Initial Margin’ and ‘Variation Margin’?

Define ‘Initial Margin’ versus ‘Variation Margin’ in Derivatives Collateral