In commodity trading, the exchange removes any daily losses from a trader’s account and adds any gains to the trader’s account. This process is known as: A. initial margin. B. variation margin. C. marking to market.
To safeguard the clearinghouse, commodity exchanges require traders to settle their accounts on a daily basis. Marking to market is when any loss for the day is deducted from the trader’s account, and any gains are added to the account.
