What is Mark to Market (MTM)?

MTM, or Mark-to-Market, is a process used in the stock market to assess the current value of your trading positions. In simpler terms, it’s like taking a snapshot of your investments at the end of each trading day to determine their current market value. This helps you track how your trades are performing in real-time.

Here’s how it works: Let’s say you bought a stock yesterday, and its price has changed since then. MTM calculates the difference between the purchase price and the current market price. If the value has gone up, you have a positive MTM, indicating a profit. Conversely, if the value has decreased, you have a negative MTM, signaling a loss.

MTM is crucial for traders to stay updated on their portfolio’s performance and make informed decisions. It provides a clear picture of how your investments are faring in the dynamic stock market.