The daily settlement process that credits gains or deducts losses from a futures customer's account is called:
A) the variation margin.
B) marking-to-market.
C) the initial margin.
D) the maintenance margin.
E) the gain/loss ratio.

Question

Quizplus · Accepted Answer

The daily settlement process that credits gains or deducts losses from a futures customer's account is called marking-to-market. This process involves updating the value of the futures contract to reflect the current market price and settling any gains or losses. The variation margin is the amount of cash or securities that must be added or subtracted from an account in order to bring it back up to the initial margin requirement. The initial margin is the amount of money that must be deposited into a futures account to enter into a futures contract. The maintenance margin is the minimum amount of equity that must be maintained in a futures account to keep the position open. The gain/loss ratio is a measure of the profitability of a trading strategy.

The Daily Settlement Process That Credits Gains or Deducts Losses