What is Mark-to-Market|MTM| Futures| Derivatives|CFA Level1

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This video explains Mark-to-Market (MTM) from Futures, Derivatives. It will help us to understand how daily settlement happens in Futures Market.
@FinEx Training aims to help CFA aspirants and Investment Banking Operations working professionals understand the concept of Finance.
Hi. I am, Ashok Kumar Kasi, ex-IIM alumni and the Founder of FinEx (Financial Exchange)Training. It is a Training Institute for CFA. This channel has content for CFA aspirants and General Finance for Investment Banking Operations. I can be contacted at 9840032032 for CFA training in Mumbai.
Whatsapp no: 9840032032. www.finextraining.com
#cfalevel1 #mtm #futures #derivatives

[@RoBoTcLoNe]

Very explanatory video, thank you

[@FinExTraining]

Thank you so much for the comments! Its very encouraging!

[@GyanSwar]

Thanks a lot for the valuable session.

[@FinExTraining]

Thank you so much for watching the video.🙏Happy Learning.

[@rameezramz8161]

Thanks a lot sir for explaining in English as the most of the videos are in Hindi which i could not understand.

[@FinExTraining]

Thank you for watching and commenting!. Feel free to watch other videos as well.

[@haribabute8053]

Thank you sir...

[@FinExTraining]

Thank you for watching the video and commenting! Feel free to watch other videos as well.

[@Satyakam85]

great explanation Ashok. Just for clarification, these settlements (in this example) are done by the Exchange since this is a Futures Derivative example which should involve Exchange ?

[@FinExTraining]

Yes. Thank you so much for watching the video and commenting! Happy Learning.

[@bhanupriya2528]

Please clear my doubt that Initial margin is fixed where as on daily basis variable margin take places?

[@FinExTraining]

Yes. Initial margin is based on the contract value. Generally, it is around 30-40% of the contract value. Daily basis, variable margin takes place.

[@raghuramc1536]

Just a layman question . I believe the deposit of 40% should be refundable. But even then will the opportunity cost of interest loss for entering to future contract by paying this 40% exchange commission will also be calculated.

[@FinExTraining]

Yes

[@PavanKumar-rv2ww]

Sir what is contract size,price denominator and face value in futures

[@FinExTraining]

Contract size is Price per unit x Lot size x No. of Lots.......I am not sure about your other questions, sorry.

[@deanshervineaf]

If changes in price reflected in the MTM at what price the contract will by settled at the maturity?

[@FinExTraining]

Its a cash settlement based on MTM. Only the profit and loss will be exchanged, not the actual shares. So, the entire amount will not be exchanged. One party will take the profit, another party will take the loss.

[@vaasutheseeker1218]

2.13 - buyer or seller whose expects market goes up ?

[@FinExTraining]

Buyer expects the market to go up in Futures.

[@vaasutheseeker1218]

Is this change in forwards contract?

[@FinExTraining]

@@vaasutheseeker1218 Nope. Its the same.