Mark to Market

Mark to market is the practice of revaluing open positions at current market prices rather than at the prices where they were opened. Each revaluation updates the position's unrealised profit or loss, which in turn feeds the account's equity, free margin and margin level. Retail trading platforms mark positions to market continuously, tick by tick, which is why floating P/L changes even when a trader does nothing. The concept also has scheduled forms: futures exchanges settle variation margin daily against an official closing price, and brokers apply overnight financing at a defined rollover time. Marking to market keeps account values honest and margin calculations current, but it also means that temporary price swings show up immediately as equity fluctuations, whether or not a position is ever closed at those levels.