Mark to market is calculated by marking each transaction in security to the closing price of the security at the end of trading. In case the security has not been traded on a particular day, the latest available closing price is considered as the closing price. In case the net outstanding position in any security is nil, the difference between the buy and sell values shall be considered as notional loss for the purpose of calculating the mark to market margin payable. The mark to market margin (MTM) is collected from the member before the start of the trading of the next day. The MTM margin is collected/adjusted from/against the cash/cash equivalent component of the liquid net worth deposited with the Exchange.
The MTM margin is collected on the gross open position of the member. The gross open position for this purpose means the gross of all net positions across all the clients of a member including broker’s proprietary position. For this purpose, the position of a client is netted across its various securities and the positions of all the clients of a member are grossed. There is no netting off of the positions and set-off against MTM profits across two rolling settlements i.e. T day and T+1 day. However, for computation of MTM profits/ losses for the day, netting or set-off against MTM profits is permitted.