Complete the attached spreadsheet and upload it with your answers. Mark to market (MTM) is an accounting practice that involves adjusting the value of an asset or liability to reflect its current market value. This is done by estimating the price that the asset or liability would fetch if it were sold on the open market on a given day. Currency futures are marked to market on a daily basis. When the currency moves in the opposite direction of your position, your broker may do a "margin call" on your account: either you put up more collateral or the broker would sell (liquidate) your position.

Mark to market in futures contracts
Suppose it is September, and you buy a December euro futures contract (you go long in December euro).
This means you will profit if the euro (EUR) appreciates relative to the dollar (USD).
Conversely, you will take a loss if the euro depreciates. You execute this transaction through your broker.
and the order is executed on the futures exchange at a price at which another trader is willing to sell the
identical contract (the seller goes short in December euro contract).
The table below shows how the contractual profits and losses evolve over time and its effects on your
margin account over a 7-day period.
Day	Futures Price (USD/EUR)	Changes in Futures Price (USD/EUR)	Gain or Loss	Cumulative Gain or Loss	Margin Account
t (Sep-16)	1.3321	0	0		$ 2,000.00
t+1 (Sep-17)	1.3315	-0.0006		$ -	$ 2,000.00
t+2 (Sep-18)	1.3304	-0.0011		$ -	$ 2,000.00
t+3 (Sep-19)	1.3288	-0.0016		$ -	$ 2,000.00
t+4 (Sep-20)	1.3264	-0.0024		$ -	$ 2,000.00
t+5 (Sep-21)	1.3296	0.0032		$ -	$ 2,000.00
t+6 (Sep-22)	1.3301	0.0005		$ -	$ 2,000.00
Notes: The futures price column lists the daily settle prices in the futures market. The contract size for the euro contract is assumed to be EUR125,000. The initial margin is USD2,000, and the maintenance margin is USD1,500. The gain or loss is the change in the futures prices (USD/EUR) multiplied by the size of the contract. The cumulative gain or loss is the sum of the daily gain or loss.
Suppose your trade was filled on Sep-16, at the end of trading, and the settle price (or final futures trading
price) for that day for the December contract was $1.3321/EUR. You deposit your initial margin of $2,000 in
your margin account (note that the trader who sold you this contract also deposited $2,000 as initial margin).
We assume a $1,500 maintenance margin: if the value of your margin account drops by more than $500
because of losses in your futures position, you will be required to bring the accounts balance back up
to the initial $2,000.
Suppose that on Sep-17 the dollar price of the December euro futures contract falls by $0.0006/EUR,
to $1.3315/EUR. This is the new daily settle price of the contract, and it affects the balance in your margin
account. Because you are long in the euro contract, and the futures price of the euro fell, money is taken
out of your margin account. How much is your daily loss? This can be estimated as the change in the daily
settle price times the size of the contract.
		$0.0006/EUR x EUR 125,000 = $75.
Therefore, $75 is subtracted from your account and deposited in the margin account of the person who
shorted the EUR (your loss becomes her gain and vice versa).
This process continues every day, until the maturity of the contract.