Is the Cash Flow Impact of MTM the Same for Both Long and Short Positions? ▴ Learn

Is the Cash Flow Impact of MTM the Same for Both Long and Short Positions?

Yes, the mechanism of MTM is the same for both long and short positions. If the market price moves favorably for the position (up for long, down for short), the trader receives a cash credit.

If the market price moves unfavorably (down for long, up for short), the trader pays a cash debit. The direction of the cash flow depends on the position and the direction of the price change.

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