what is market to market in commodity trading ?

Question

i need the details about future commodity trading

Answer 1

You have the spelling wrong. It's "Mark to Market" or "Marked to Market". Just click on link below for in-depth explanations.

"Mark To Market - MTM

Definition:

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.

Usage:

1. 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.

Answer 2

It is not market ot market but marking to market. This if you enter into a trade either in the real assets or futures and if you play with margin, then every day the broker checks out your positions and updates your balance. If you are long and the market has gone down then you will have to pay in additional margin this is marked in your account which is called marking to market. The process of updating ones trading account according to the state of the market.