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Glossary

What Does Mark-to-Market Mean?

Mark-to-market (MTM) means valuing a position at its current market price. For traders it usually means the running profit or loss of their positions for the day.

QuantPower Research · Updated 3 Nov 2026 · 2 min read

MTM in two senses

  • Intraday MTM: the profit or loss on your open and closed positions today at current prices. Brokers and platforms show it live, and an MTM stop loss acts on it.
  • Daily MTM settlement: for futures, the clearing corporation settles gains and losses in cash every day, based on the day's settlement price. Your account is credited or debited even though the position stays open.

How MTM is calculated

Formula
MTM = (current price − entry price) × quantity, for a long position. For a short position, MTM = (entry price − current price) × quantity.

An example

Example
You buy one lot of Nifty futures (65 units) at 25,000. Nifty futures settle at 25,120 at the end of the day. Your MTM is (25,120 − 25,000) × 65 = ₹7,800, credited to your account. If they settle at 24,900 the next day, the MTM is (24,900 − 25,120) × 65 = −₹14,300, debited.

For options, the buyer pays the premium upfront, so the MTM on a long option is shown as a running profit or loss but is not settled daily. Option sellers keep margin blocked, and the broker tracks their MTM against it.

Daily MTM on one lot of Nifty futures bought at 25,000: ₹7,800 credited at a 25,120 settlement, ₹14,300 debited at 24,900 (example from this page)

Why MTM matters

  • Margin: losses on futures are debited daily, so your account must keep enough free margin.
  • Risk limits: watching the combined MTM of all positions shows how close you are to your daily loss limit.
  • Automation: an MTM stop loss squares off positions when the day's combined MTM reaches a limit you set.
Example
A trader with a daily MTM loss limit of ₹8,000 runs a short straddle and a futures trade. At 11:30 the straddle is down ₹5,200 and the futures trade ₹2,100. The combined MTM is −₹7,300, ₹700 from the limit.

Learn more

Frequently asked questions

What does MTM loss mean?

The day's loss on your positions at current prices. It can recover if prices move back before you exit.

Is MTM profit real profit?

Not until you close the position, except for futures, where daily MTM is settled in cash. Even then, tomorrow's MTM can reverse it.

What is an MTM stop loss?

An order rule that squares off positions when the day's combined MTM loss, or profit, reaches a limit.

Trading involves substantial risk. Examples on this page are hypothetical and are not investment advice.

Related pages

ProductHow to Place a Stop Loss Order Across All Your PositionsThis page shows how to place a stop loss order on one trade or on all your positions at once, and how an MTM limit caps the whole day's loss.GlossaryWhat Is Margin in Trading?Margin is the money your broker blocks in your account to let you hold a position.GlossaryWhat Is a Trading Lot Size?A lot size is the fixed number of units in one futures or options contract.