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Mark-to-Market Settlement (MTM)

Marked-to-market, or mark-to-market (MTM) settlement, refers to the process by which the profit or loss made on an open position of a derivatives contract is adjusted on the same day from the trader's account.

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Marked-to-market, or mark-to-market (MTM) settlement, refers to the process by which the profit or loss made on an open position of a derivatives contract is adjusted on the same day from the trader's account. The MTM calculations are done based on the closing price of the day. With the help of brokers, the exchange collects the losing amount from a trader who has suffered a loss and pays the same to the gaining party.

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