Mark-to-Market
The daily revaluation of open futures positions to the settlement price, with gains and losses settled in cash each session.
Mark-to-market (MTM) is the daily accounting process where all open futures positions are repriced to the day's settlement price, and the resulting gain or loss is immediately transferred between accounts through the clearinghouse.
A winning long position receives cash; a losing position has cash debited. This daily settlement eliminates the buildup of large uncollateralized exposures and is the mechanism that makes futures safe enough for exchange trading with relatively thin margins.
MTM also means that unrealized gains in futures are not truly "unrealized" — they flow to cash each day and are available to use as margin for new positions.
On the desk
Long 1 ES at 5,400. Day 1 closes at 5,415 → +$750 credited. Day 2 closes at 5,390 → −$1,250 debited. After two days the account is down $500 even though the trader holds the same position they entered.