Daily revaluation of open positions at the settlement price, with gains credited and losses debited to the account in cash.
Futures accounts realize profit and loss every day, not just when a position is closed. This is what keeps the margin system honest and what makes section-1256 taxation treat open futures positions as sold at year end.
A losing position drains cash daily and can trigger a margin-call even if you intend to hold.
Example: you are long one ES from 5,000. Settlement is 4,990. Your account is debited $500 that evening. If the next settlement is 5,010, you are credited $1,000.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Margin and leverage. A $5,000 deposit can control a $100,000 position, which is 20:1 leverage. Because the loss is measured on the full $100,000, a 2.5% move against you halves the deposit and brings a margin call, and a 5% move uses all of it.
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