Mark-to-Market and Daily Settlement

Fixed Income and Derivatives Mastery · 3:44

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Lyrics

[Verse 1]
Every day the market moves, prices up and down
Futures contracts need a way to keep accounts sound
When you hold a position, long or short you'll see
Daily settlement ensures no one trades for free

[Chorus]
Mark to market every day, gains and losses clear the way
Settlement keeps it fair and true, daily profit flows to you
Mark to market every day, debts are paid without delay
Clearing house protects us all, daily settlement's the call

[Verse 2]
Yesterday you bought a contract, corn at fifty cents
Today the price is sixty, profit makes good sense
Ten cents times a thousand bushels, one thousand dollars earned
Into your margin account, that money has returned

[Chorus]
Mark to market every day, gains and losses clear the way
Settlement keeps it fair and true, daily profit flows to you
Mark to market every day, debts are paid without delay
Clearing house protects us all, daily settlement's the call

[Bridge]
If the market moves against you, money leaves your side
Margin calls may come your way if funds run low inside
No waiting till expiration, cash moves every night
Daily settlement process keeps the system running right

[Verse 3]
Clearing house stands in between every buyer, seller too
Eliminates the credit risk in everything they do
Mark positions to the market, settle every trade
Daily cash flows guarantee that promises are paid

[Chorus]
Mark to market every day, gains and losses clear the way
Settlement keeps it fair and true, daily profit flows to you
Mark to market every day, debts are paid without delay
Clearing house protects us all, daily settlement's the call

[Outro]
Daily settlement's the way
Mark to market every day
Futures trading, safe and sound
Daily settlement keeps us bound

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