What are Mark-to-Market Losses?

Mark-to-market losses are losses in an asset's value caused solely by a decline in market price.

How Do Mark-to-Market Losses Work?

Mark-to-market losses appear when an asset is priced according to a mark-to-market (MTM) accounting method. Under MTM, an asset's value is adjusted on a daily basis to reflect its market price. In other words, an asset experiences a mark-to-market loss if its market price falls from one business day to the next. For example, a mutual fund sustains a mark-to-market loss if its net asset value (NAV) falls from $1,200 at the end of trading on Monday to $1,100 at the end of trading on Tuesday.

Why Do Mark-to-Market Losses Matter?

Mark-to-market losses are similar to paper losses in the sense that they are unrealized losses. That is, a holder does not experience a capital loss because he or she has not actually sold units of the asset.

Ask an Expert about Mark-to-Market Losses

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Mark-to-Market Losses.

Be the first to ask a question

If you have a question about Mark-to-Market Losses, then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

Verified Content You Can Trust
verified   Certified Expertsverified   5,000+ Research Pagesverified   5+ Million Users