How is the marking to market settlement going to affect the margin balance of the trader ? Explain.

Marking-to-market means that the margin account of the traders is adjusted every day using the daily settlement price. If marking-to-market results in gain for the trader, the margin balance will be increased by the amount of gain. If it results in a loss for the trader, the margin balance will be decreased by the amount of loss. By marking-to-market, the contract can be considered closed out every day; at the beginning of the next day, a new contract is effectively entered into.