How often is Mark to Market (MTM) assessed in trading?
In trading, MTM (Mark to Market) is typically calculated daily. At the end of each trading day, MTM helps determine the day's profits or losses on open positions. This regular assessment allows traders to effectively monitor and manage their portfolio's performance. It is essential for traders to understand their MTM calculations, as it plays a critical role in informed decision-making in trading.
What is Mark to Market (MTM)?
Mark to Market (MTM) is the process of valuing an asset based on its current market price rather than its historical cost. In trading, MTM calculates the unrealized profit or loss on open positions at the end of each trading day. This helps in determining the actual value of your positions in real-time.
When is MTM assessed?
- MTM is assessed at the end of each trading day.
- The calculated profit or loss from MTM is updated in your trading account at the close of the market.
What does MTM include?
- The unrealized profit or loss on open positions at market close
- The current market value of assets held in your portfolio
To ensure proper portfolio management, it is recommended to regularly review your MTM calculations and adjust your positions if needed.
What if...
Scenario | Outcome |
---|
I don’t understand my MTM calculation | Review the calculation with your broker or trading platform support to clarify how the MTM values are derived. |
I experience significant fluctuations in MTM | Monitor the market conditions closely. Volatility can lead to large MTM changes, so it’s important to make informed trading decisions. |
I need to assess the MTM value of my closed positions | MTM is calculated on open positions, so review your trade history and profit or loss reports for closed positions. |
Last updated: 27 Jun 2025
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