What is marking to market operation in futures trading?
Marking -to-market : In the futures market, at the end of each trading day, the margin account is adjusted to reflect the investor’s gain or loss depending upon the futures closing price. This is called markingtomarket. Margins for trading in futures Margin is the deposit money that needs to be paid to buy or sell each contract. The margin required for a futures contract is better described as performance bond or good faith money. The margin levels are set by the exchanges based on volatility (market conditions) and can be changed at any time. The margin requirements for most futures contracts range from 2% to 15% of the value of the contract. In the futures market, there are different types of margins that a trader has to maintain. At this stage we look at the types of margins as they apply on most futures exchanges. Initial margin: The amount that must be deposited by a customer at the time of entering into a contract is called initial margin. This margin is meant to cover the larges
