Definition. The daily settlement of profits and losses on open futures positions at the settlement price. The result hits your account every day, not just when the position is closed.
How it works
If the settlement price has risen, the buyer receives the difference and the seller pays it, and vice versa. When account funds fall below the required margin, the broker may issue a margin call.
Example
A position held for several days is revalued daily. The account balance changes every day even though the position hasn't been closed.
What to watch out for
The rules on margin calls and any forced liquidation by the broker are set out in your broker agreement.
You'll find the full explanation with graphics, examples and exercises in the 🖥️ Order flow atlas space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
