Mark-to-Market Definition. Mark-to-Market, or fair value accounting, is an accounting process for re-evaluating the book value or previous mark-to-market value of all open positions by using current market prices at a point in time. Generally, book values, based on the original cost of the financial instrument, commodity, or currency, can become outdated and inaccurate as a true measure of value. In high volume trade environments, regulators require that banks and brokers perform an ongoing assessment of risk by using current market prices. Forex brokers that extend leverage must also mark-to-market to evaluate and mitigate their outstanding risk on an ongoing basis. Typically, these adjustments are performed at the end of the trading day. If the account value after adjustment falls beneath the margin level allowed, a margin call will ensue. The forex trader will be asked to deposit more funds, deliver more collateral, or liquidate open positions in order to return to an acceptable level.
Forextraders' Broker of the Month
ForexTime (FXTM) is an award-winning platform that certainly has the feeling of being set up by people who know what they are doing. The firm demonstrates an understanding of what helps traders make better returns, and its success can be measured by the fact that it's doubled the number of clients it supports in recent years. The fact that the broker has grown to have more than two million accounts suggests it is getting things right for clients.