Why is marking-to-market each day in cash such a powerful risk management tool for futures markets? How does this risk management tool influence the way the futures market defines capital?

What problem does the marking-to-market system create for market participants?

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Markingtomarket is a risk management tool for futures markets that involves valuing futures contracts at their current market price each day and adjusting the margin account of the parties involved accordingly This helps to mitigate risk by ensuring that losses are covered by the parties in a timely manner reducing the likelihood of default Markingtomarket each day is a powerful risk management tool for futures markets because it ensures that the parties involved in a futures contract ... View the full answer