rounded corner
rounded corner
top border

A Guide to Understanding Opportunities and Risks in Futures Trading

from The National Futures Association

Gains and Losses on Futures Contracts

Gains and losses on futures contracts are not only calculated on a daily basis, they are also credited or debited to each market participant’s brokerage account on a daily basis. Thus, if a speculator were to have a $500 profit as the result of a day’s price changes, that amount would immediately be credited to his or her account and, unless required for other purposes, could be withdrawn. On the other hand, if the day’s price changes resulted in a $500 loss, the account would be debited for that amount.

The process just described is known as daily cash settlement and it’s an important feature of futures trading. As will be seen when margin requirements are discussed later, it is also the reason a customer who incurs a loss on a futures position may be called on to immediately deposit additional funds.

Next chapter: The Arithmetic of Futures Trading and Leverage

Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. is not a broker, nor does it have an affiliation with any broker.

Copyright ©2005-2018, a product. All rights reserved.

About Us  •   Sitemap  •   Legal  •   Privacy Statement