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I assume we are talking about the daily mark to market of a futures
contract. From a contractual standpoint you are correct, that is the
way the contract works. However, most contracts are bought on Margin.
My guess is that they are showing an increase in your "Purchase Power"
or an increase in your "Excess Equity" when you win. You should think
of this as a "Cash" account that isn't really cash until you close out
the position.
This is probably a glitch with how their accounting system and their
portfolio administration systems interact. You are seeing the results
of the accounting system, when in fact you should be seeing the
results of the portfolio administration system.
Jim
______________________________ Reply Separator
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Subject: Account cash balance
Author: "Scott Hoffman" [SMTP:trader20@xxxxxxxxxxxxxx] at EXCHANGE
Date: 11/11/98 12:39 PM
I asked my broker the following question, but he didn't answer it. I thought
I'd give the list a try.
Scott Hoffman
Issaquah, WA
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This brings up a question I have about daily marking to market. In the
literature, it says cash balances are updated daily on open positions. This
is the whole idea of daily settlement, or marking to market. If my open
position goes my way that day, I get cash in my account that day. Likewise,
cash is debited from my account when an open position goes against me.
However, from the daily equity statements I get it's clear that my cash
balance, or ACB, only gets updated when a position is closed out, or a fee
is charged. Seems like I could have a position go very far against me and
although LV would reflect the open loss, cash is unaffected until the
position is closed. This seems contrary to what daily settlement, or marking
to market means. Can you explain?
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