Both answers are iin parenthesis and in bold. Thank You. Margin requirements and marking to market:Discuss how the exchange requirements that mandate traders to put up collateral in the form of a margin requirement and to use this account to mark their profits or losses for the day serve to eliminate credit or default risk.

Because both parties (have to post or neither party has) margin when they enter into a futures contract and because they mark to market (every day until the delivery date on the delivery date or on the delivery date), we are (not assured or assured) the party and the counterparty to the contract have already posted the gain or loss to the other and the risk of default (still exists or is thereby negated.)