The daily settlement of obligations on futures positions is called ________.
A) a margin call
B) marking to market
C) a variation margin check
D) the initial margin requirement

Question

Quizplus · Accepted Answer

Marking to market is the process of adjusting the value of futures contracts on a daily basis to reflect the current market price. This process involves the daily settlement of obligations on futures positions, which ensures that both parties involved in the transaction are up-to-date on their financial liabilities. Margin calls, variation margin checks, and initial margin requirements are all related to the initial and ongoing collateral requirements for futures trading, but are not directly related to the daily settlement of obligations.

The Daily Settlement of Obligations on Futures Positions Is Called