Mark-to-market (daily settlement of futures)
Mark-to-market in futures is the daily revaluation of every open position at the exchange's settlement price, with the gain or loss paid or collected in cash that day. Each position effectively restarts from the new settlement price, which is why futures losses must be funded as they occur rather than at the end.
Senzoukria · Glossary · Updated September 2026
Definition
At the end of each trading day the clearing house values every open position at the settlement price. The difference from the previous day's settlement, or from the entry price on the first day, is credited to winners and debited from losers. The position is then carried at the new settlement price as if it had been reopened there.
Worked example
A trader buys 2 MNQ at 18,000.00. MNQ is worth $2 per index point.
- Day 1 settlement 18,050.00: +50.00 × $2 × 2 = +$200 credited.
- Day 2 settlement 17,990.00: (17,990.00 − 18,050.00) × $2 × 2 = -$240 debited.
- Cumulative: +$200 − $240 = -$40, which equals (17,990.00 − 18,000.00) × $2 × 2. Daily marking changes the timing of cash flows, not the total.
Why it matters
- Losses on an open position consume account equity every day, which can trigger a margin call before the position is closed.
- A profitable position generates cash that is available before exit.
- Account equity at the broker reflects settlement prices, not the last price on your chart.
- Prop firm drawdown rules often evaluate equity at the end of the day, which is a different measure from intraday unrealised P&L.
In Senzoukria
Simulated P&L is computed as price difference × multiplier × quantity against the current price, and live positions show the unrealised P&L that the broker's PnL feed reports, coalesced to at most four updates a second per instrument. Neither is a mark-to-market at settlement: the application does not receive or apply settlement prices, and the broker's statement remains the reference for daily cash movements.
Common mistakes
- Believing a loss is not real until the position is closed.
- Reconciling a statement with chart closes instead of settlement prices.
- Forgetting that a large unrealised gain can reverse and be debited the next day.
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Frequently asked questions
- Is mark-to-market the same as unrealised P&L?
- Unrealised P&L is the value of the open position at the current price, updated continuously. Mark-to-market is the daily process that turns the change since the last settlement into an actual cash movement at the settlement price.
- Why does my account balance change even though I did not trade?
- Because an open futures position is marked to market every day. The difference between today's and yesterday's settlement prices is credited or debited as variation margin even without any trade.