What is Mark-to-market?

Futures have a feature that surprises many CFD traders: profits and losses are not left to pile up until you close. Every trading day, the exchange sets an official settlement price for each contract (for gold, based on trading around 13:30 New York time, explained later in this chapter). The clearing house then compares each open position with that settlement price and moves money accordingly. Accounts that lost value that day pay; accounts that gained value receive. This daily settling is called mark-to-market. In plain words: losers pay winners every single day.