In financial terms what is a mark to market?

Answer 1

it means current value

Answer 2

Mark To Market - MTM

1. The act of recording the price or value of a security, portfolio or account to reflect its current market value rather than its book value.

2. In terms of mutual funds, a MTM is when the net asset value (NAV) of the fund is valued upon the most current market values.

This is done most often in futures accounts to make sure that margin requirements are being met. If the current market value causes the margin account to fall below its required level, the trader will be faced with a margin call.
http://www.answers.com/topic/mark-to-market

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In economics, mark to market is the act of assigning a value to a position held in a financial instrument based on the current market price for that instrument, or on a fair valuation based on the current market prices of similar instruments.
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The practice of mark to market as an accounting device first developed among traders on futures exchanges in the 19th century. It wasn't until the 1980s that the practice spread to big banks and corporations far from the traditional exchange trading pits, and beginning in the 1990s, mark-to-market accounting began to give rise to scandals.

Answer 3

You are probably referring to an accounting method. It means adjusting the carrying value on your balance sheet of a financial instrument to its market value as of the balance sheet date. (You are "marking up or down to the market value".) The change in value from the previous period is a gain or loss, that depending upon the purpose of the instrument, is either recorded against current income or recorded to the other comprehensive income account. For more info research "hedge accounting".

Answer 4

when you assign a value to something based on the current market price.

Its for accounting in futures exchanges, or thats how it started at least.

An Example I found:

As an example, what if an investor owns 100 shares of a particular stock purchased originally for $40 per share, and that stock is currently trading at $60 per share, then the "mark to market" value of the investor's shares is equal to (100 shares × $60), or $6000, whereas the Book value might (depending on the accounting principles used) only equal $4000.

Answer 5

It's valuation of a portfolio.

It's really easy to valuate portfolio with liquid assets like stocks or bonds... but it's another story when we are talking about derivatives, where the mark to market is really important and difficult to do since you have to build hypothesis.

Some products or portfolio are really tough to valuate, so this idea of mark to market as a picture is appropriate. At 6:PM the mark to market of JP morgan's exotic position is 5,500,000 USD for example.

Answer 6

Take the total number of shares and multiply by current market value. It is just another way of saying current value.

Answer 7

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